exv10w8






Exhibit 10.8




Execution Version




SECOND AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT




     THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (together with any schedule,
annex, or exhibit attached hereto, as the same may be amended, restated, or otherwise modified
from time to time, this “Agreement”) is entered into as of April 20, 2009 (the “Second Amended
and Restated Effective Date”) among SILICON VALLEY BANK, a California corporation (“Bank”),
FINANCIAL ENGINES, INC., a California corporation (“Financial Engines”) and FINANCIAL ENGINES
REINCORPORATION SUB, INC. (“Reincorporation Sub”) a Delaware corporation (each of Financial
Engines and Reincorporation Sub may be referred to as a “Borrower” and collectively,
“Borrowers”), and amends, restates, replaces and supersedes in its entirety that certain
Amended and Restated Loan and Security Agreement dated as of June 26, 2008, (the “2008 Loan
Agreement”) among Bank and Borrowers. Definitions of capitalized terms used in this Agreement
are set forth in Section 13 below. The parties agree as follows:



     1 ACCOUNTING AND OTHER TERMS



     Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. Capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in Section 13. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning provided by
the Code to the extent such terms are defined therein.



     2 LOAN AND TERMS OF PAYMENT



     2.1 Promise to Pay. Borrowers hereby jointly, severally and unconditionally promise to
pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid
interest thereon as and when due in accordance with this Agreement.



     2.1.1 Revolving Advances.



          (a) Availability. Subject to the terms and conditions of this Agreement, Bank
shall make Advances not exceeding the Availability Amount. Amounts borrowed hereunder may be
repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable
terms and conditions precedent herein.




          (b) Termination; Repayment. The Revolving Line terminates on the Revolving
Line Maturity Date, when the principal amount of all Advances, the unpaid interest thereon,
and all other Obligations relating to the Revolving Line shall be immediately due and payable.




     2.1.2 Letters of Credit Sublimit.



     As part of the Revolving Line, Bank shall issue or have issued Letters of Credit for any
Borrower’s account. Such aggregate amounts utilized hereunder shall at all times reduce the
amount otherwise available for Advances under the Revolving Line. The aggregate amount
available to be used for the issuance of Letters of Credit may not exceed Two Million Five
Hundred Thousand Dollars ($2,500,000). The face amount of outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not
exceed the lesser of: (A) Two Million Five Hundred Thousand Dollars ($2,500,000) at any time
or (B) the Availability Amount. Notwithstanding the foregoing, Bank may issue standby Letters
of Credit with an aggregate face amount of up to One Million Five Hundred Thousand Dollars
($1,500,000) at any time outstanding even if there is no availability under the Borrowing
Base. If, on the Revolving Line Maturity Date, there are any outstanding Letters of Credit,
then on such date Borrowers shall provide to Bank cash collateral in an amount equal to 100%
of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to
become due in connection therewith (as reasonably estimated by Bank in its good faith business
judgment), to secure all of the Obligations relating to said Letters of Credit. All Letters of
Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be
subject to the terms and conditions of Bank’s standard Application and Letter of Credit
Agreement (the “Letter of Credit Application”). Borrowers agree to execute any further
documentation in connection with the Letters of Credit as Bank may reasonably request.



 









 





          (a) The obligation of Borrowers to immediately reimburse Bank for drawings made under Letters
of Credit in accordance with the terms of the Letter of Credit Application and the Letter of Credit
shall be absolute, unconditional, and irrevocable, and Borrowers shall perform strictly in
accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit
Application.




          (b) Borrowers may request that Bank issue a Letter of Credit payable in a Foreign Currency. If
a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an
Advance to Borrowers of the equivalent of the amount thereof (plus fees and charges in connection
therewith such as wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing rate of
exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the
country issuing such Foreign Currency.




          (c) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter
of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit
Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of
such Letter of Credit. The amount of the Letter of Credit Reserve may be adjusted by Bank from time
to time to account for fluctuations in the exchange rate. The availability of funds under the
Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such
Letter of Credit remains outstanding.




     2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line, Borrowers may enter into
foreign exchange contracts with Bank under which a Borrower commits to purchase from or sell to
Bank a specific amount of Foreign Currency (each, a “FX Forward Contract”) on a specified date (the
“Settlement Date”). FX Forward Contracts shall have a Settlement Date of at least one (1) FX
Business Day after the contract date and shall be subject to a reserve of ten percent (10%) of each
outstanding FX Forward Contract in a maximum aggregate amount equal to Two Million Five Hundred
Thousand Dollars ($2,500,000) (the “FX Reserve”). The aggregate amount of FX Forward Contracts at
any one time may not exceed ten (10) times the amount of the FX Reserve. The amount otherwise
available for Credit Extensions under the Revolving Line shall be reduced by an amount equal to ten
percent (10%) of each outstanding FX Forward Contract (the “FX Reduction Amount”). Any amounts
needed to fully reimburse Bank will be treated as Advances under the Revolving Line and will accrue
interest at the interest rate applicable to Advances.



     2.1.4 Cash Management Services Sublimit. Borrowers may use up to Two Million Five Hundred
Thousand Dollars ($2,500,000) of the Revolving Line for Bank’s cash management services which may
include merchant services, direct deposit of payroll, business credit card, and check cashing
services identified in Bank’s various cash management services agreements (collectively, the “Cash
Management Services”). Any amounts Bank pays on behalf of Borrowers for any Cash Management
Services will be treated as Advances under the Revolving Line and will accrue interest at the
interest rate applicable to Advances.



     2.1.5 Term Loan. Bank shall make one (1) term loan available to Borrowers in an amount up to
the Term Loan Amount on the Second Amended and Restated Effective Date subject to the satisfaction
of the terms and conditions of this Agreement. Borrowers shall repay the Term Loan in (i)
thirty-six (36) equal installments of principal, plus (ii) payments of accrued interest (the “Term
Loan Payment”). Beginning on the first day of the month following the month in which the Funding
Date occurs, the principal portion of each Term Loan Payment shall be payable on the first day of
each month. The interest portion of each Term Loan payment shall be paid on each Interest Payment
Date. Borrower’s final Term Loan Payment, due on the Term Loan Maturity Date, shall include all
outstanding principal and accrued and unpaid interest under the Term Loan. The Term Loan may be
prepaid at any time without penalty.



     2.2 Overadvances. If, at any time, Borrowers’ Obligations under Section 2.1.1, 2.1.2, 2.1.3,
or 2.1.4 exceed the lesser of either (i) the Revolving Line or (ii) subject to the qualification
contained in Section 2.1.2 with respect to Letters of Credit with an aggregate face amount of up to
$1,500,000, the Borrowing Base, Borrowers must immediately pay Bank the excess.



     2.3 Payment of Interest on the Credit Extensions.



          (a) Interest Rate.




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               (i) Advances. Subject to Section 2.3(b), the principal amount outstanding under the
Revolving Line shall accrue interest at a floating per annum rate equal to .75% percentage points
above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.3(g)
below.



               (ii) Term Loan. The Term Loan shall bear interest on the outstanding principal
amount thereof from the date when made, continued or converted until paid in full at a rate per
annum equal to (i) for Prime Rate Term Loans, the Prime Rate plus 1.50%, and (ii) for LIBOR Term
Loans, the LIBOR Rate plus 4.00%. On and after the expiration of any Interest Period applicable to
any LIBOR Term Loan outstanding on the date of occurrence of an Event of Default or acceleration of
the Obligations, the Effective Amount of such LIBOR Term Loan shall, during the continuance of such
Event of Default or after acceleration, bear interest at a rate per annum equal to the Prime Rate
plus five percent (5.00%). In no event shall Borrowers maintain at any time LIBOR Term Loans having
more than two (2) different Interest Periods.



          (b) Default Rate. Immediately upon the occurrence and during the continuance of an
Event of Default, Obligations shall bear interest at a rate per annum which is five percentage
points above the rate that is otherwise applicable thereto in the case of Advances or Prime Rate
Term Loans (the “Default Rate”). Payment or acceptance of the increased interest rate provided in
this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.




          (c) Prime Rate Adjustments. Changes to the interest rate of any Credit Extension
based on changes to the Prime Rate shall be effective on the effective date of any change to the
Prime Rate and to the extent of any such change.




          (d) LIBOR Term Loans. The interest rate applicable to each LIBOR Term Loan shall be
determined in accordance with Section 3.6(a) hereunder. Subject to Sections 3.6 and 3.7, such
rate shall apply during the entire Interest Period applicable to such LIBOR Term Loan, and interest
calculated thereon shall be payable on the Interest Payment Date applicable to such LIBOR Term
Loan.




          (e) 360-Day Year. Interest shall be computed on the basis of a 360-day year for the
actual number of days elapsed.




          (f) Debit of Accounts. Bank may debit any of any Borrower’s Deposit Accounts,
including the Designated Deposit Account, for principal and interest payments or any other amounts
any Borrower owes Bank when due. These debits shall not constitute a set-off.




          (g) Payments. Unless otherwise provided, interest is payable monthly on the first
calendar day of each month. Payments of principal and/or interest received after 12:00 p.m.
Pacific time are considered received at the opening of business on the next Business Day. When a
payment is due on a day that is not a Business Day, the payment is due the next Business Day and
additional fees or interest, as applicable, shall continue to accrue.




     2.4 Fees. Borrowers shall pay to Bank:



          (a) Revolving Line Commitment Fee. A fully earned, non-refundable commitment fee equal
to one-quarter of a percent (.25%) of the Revolving Line, less a pro-rated amount in respect of the
loan fee of $7000 received on the effective date of the 2008 Loan Agreement, on the Second Amended
and Restated Effective Date; and if Borrowers’ balances at Bank or Bank’s affiliates drop below
$5,000,000 at any time, Borrowers will immediately pay to Bank an additional Commitment fee of
$30,000;




          (b) Term Loan Fee. A fully-earned, non-refundable fee equal to one-half of one
percent (.50%) of the Term Loan Amount, on the Second Amended and Restated Effective Date; and




          (b) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and
expenses, plus expenses, for documentation and negotiation of this Agreement) incurred through and
after the Second Amended and Restated Effective Date, when due.




     3 CONDITIONS OF LOANS



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     3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial
Credit Extension is subject to the condition precedent that Borrowers shall consent to or have
delivered, in form and substance satisfactory to Bank, such documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:



          (a) duly executed original signatures to the Loan Documents to which it is a party;




          (b) Intentionally Omitted;




          (c) Operating Documents and a good standing certificate of each of Borrowers and Guarantor
certified by the Secretary of State of the States of California and Delaware, as applicable, as of
a date no earlier than thirty (30) days prior to the Second Amended and Restated Effective Date;




          (d) duly executed original signatures to the completed Borrowing Resolutions for each of
Borrowers;




          (e) Payoff letter duly executed by Coast DL Funding LLC in favor of Bank terminating the Oak
Hill Note and all obligations and liens relating thereto;




          (f) certified copies, dated as of a recent date, of financing statement searches, as Bank
shall request, accompanied by written evidence (including any UCC termination statements) that the
Liens indicated in any such financing statements either constitute Permitted Liens or have been or,
in connection with the initial Credit Extension, will be terminated or released;




          (g) the Perfection Certificate(s) executed by each of Borrowers and
Guarantor;




          (h) Intentionally Omitted;




          (i) the duly executed original signatures to the Reaffirmation of Guaranty, together
with the completed Borrowing Resolutions for Guarantor;




          (j) the insurance policies and/or endorsements required pursuant to Section 6.5
hereof, and




          (k) payment of the fees and Bank Expenses then due as specified in Section
2.4 hereof.




     3.2 Conditions Precedent to all Credit Extensions. Bank’s obligation to make each Credit
Extension, including the initial Credit Extension, is subject to the following:



          (a) except as otherwise provided in Section 3.4, timely receipt of an
executed Payment/Advance Form;




          (b) the representations and warranties in Section 5 shall be true in all material respects on
the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; provided,
however, that such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text thereof; and provided,
further that those representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, and no Event of Default shall
have occurred and be continuing or result from the Credit Extension. Each Credit Extension is each
Borrower’s representation and warranty on that date that the representations and warranties in
Section 5 remain true in all material respects; provided, however, that such materiality qualifier
shall not be applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof; and provided, further that those representations and
warranties expressly referring to a specific date shall be true, accurate and complete in all
material respects as of such date; and




          (c) There has not been a Material Adverse Change since the Second Amended and Restated
Effective Date.




     3.3 Covenant to Deliver.



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     Each Borrower agrees to deliver to Bank each item required to be delivered to Bank under this
Agreement as a condition to any Credit Extension. Each Borrower expressly agrees that a Credit
Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank
of such Borrower’s obligation to deliver such item, and any such Credit Extension in the absence
of a required item shall be made in Bank’s sole discretion.



     3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable
conditions to the making of an Advance set forth in this Agreement, to obtain an Advance (other
than Advances under Sections 2.1.2 or 2.1.4), Borrowers shall notify Bank (which notice shall be
irrevocable) by electronic mail, facsimile, or telephone by 12:00 p.m. Pacific time on the Funding
Date of the Advance. Together with any such electronic or facsimile notification, Borrowers
shall deliver to Bank by electronic mail or facsimile a completed Payment/Advance
Form executed by a Responsible Officer or his or her designee. Bank may rely on any telephone
notice given by a person whom Bank believes is a Responsible Officer or designee. Bank may make
Advances under this. Agreement based on instructions from a Responsible Officer or his or her
designee or without instructions if the Advances are necessary to meet Obligations which have
become due. In the case of the Term Loan, a Notice of Borrowing (in the form of Exhibit B-l) must
be received by Bank prior to 12:00 p.m. Pacific time, (i) at least three (3) Business Days prior to
the requested Funding Date, in the case of LIBOR Term Loans, and (ii) on the requested Funding
Date, in the case of Prime Rate Term Loans, specifying: (1) the amount of the Term Loan; (2) the
requested Funding Date; (3) whether the Term Loan is to be comprised of LIBOR Term Loans or Prime
Rate Term Loans; and (4) the duration of the Interest Period applicable to any such LIBOR Term
Loans included in such notice; provided that if the Notice of Borrowing shall fail to specify the
duration of the Interest Period for any LIBOR Term Loan, such Interest Period shall be one (1)
month.


The proceeds of all such Advances and the Term Loan will be made available to Borrowers on the
Funding Date by Bank by transfer to the Designated Deposit Account and, subsequently, by wire
transfer to such other account as Borrower may instruct in the Notice of Borrowing. No Advances or
Term Loan shall be deemed made to Borrowers, and no interest shall accrue on any such Credit
Extension, until the related funds have been deposited in the Designated Deposit Account.




     3.5 Conversion and Continuation Elections.



          (a) So long as (i) no Event of Default exists; (ii) Borrower shall not have sent any notice of
termination of this Agreement; and (iii) Borrower shall have complied with such customary
procedures as Bank has established from time to time for Borrower’s requests for LIBOR Term Loans,
Borrower may, upon irrevocable written notice to Bank:





     (1) elect to convert on any Business Day, Prime Rate Term Loans into LIBOR Term
Loans;




     (2) elect to continue on any Interest Payment Date any LIBOR Term Loans maturing on
such Interest Payment Date; or




     (3) elect to convert on any Interest Payment Date any LIBOR Term Loans maturing on such
Interest Payment Date into Prime Rate Term Loans.



          (b) Borrower shall deliver a Notice of Conversion/Continuation in accordance with Section
10 to be received by Bank prior to 12:00 p.m. Pacific time (i) at least three (3) Business Days in
advance of the Conversion Date or Continuation Date, if any Term Loans are to be converted into or
continued as LIBOR Term Loans; and (ii) on the Conversion Date, if any Term Loans are to be
converted into Prime Rate Term Loans, in each case specifying the:





     (1) proposed Conversion Date or Continuation Date;




     (2) aggregate amount of the Term Loans to be converted or continued;




     (3) nature of the proposed conversion or continuation; and




     (4) duration of the requested Interest Period.





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          (c) If upon the expiration of any Interest Period applicable to any LIBOR Term Loans, Borrower
shall have timely failed to select a new Interest Period to be applicable to such LIBOR Term Loans,
Borrower shall be deemed to have elected to convert such LIBOR Term Loans into Prime Rate Term
Loans.




          (d) Any LIBOR Term Loans shall, at Bank’s option, convert into Prime Rate Term Loans in the
event that (i) an Event of Default shall exist. Borrower agrees to pay Bank, upon demand by Bank
(or Bank may, at its option, charge the Designated Deposit Account or any other account Borrower
maintains with Bank) any amounts required to compensate Bank for any loss (including loss of
anticipated profits), cost, or expense incurred by Bank, as a result of the conversion of LIBOR
Term Loans to Prime Rate Term Loans pursuant to this Section 3.5(d).




          (e) Notwithstanding anything to the contrary contained herein, Bank shall not be required to
purchase United States Dollar deposits in the London interbank market or other applicable LIBOR
market to fund any LIBOR Term Loans, but the provisions hereof shall be deemed to apply as if Bank
had purchased such deposits to fund the LIBOR Term Loans.




     3.6 Special Provisions Governing LIBOR Term Loans. Notwithstanding any other provision of this
Agreement to the contrary, the following provisions shall govern with respect to LIBOR Term Loans
as to the matters covered:



          (a) Determination of Applicable Interest Rate. As soon as practicable on each Interest
Rate Determination Date, Bank shall determine (which determination shall, absent manifest error in
calculation, be final, conclusive and binding upon all parties) the interest rate that shall apply
to the LIBOR Term Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Borrower.




          (b) Inability to Determine Applicable Interest Rate. In the event that Bank shall
have determined (which determination shall be final and conclusive and binding upon all parties
hereto), on any Interest Rate Determination Date with respect to any LIBOR Term Loan, that by
reason of circumstances affecting the London interbank market adequate and fair means do not exist
for ascertaining the interest rate applicable to such Advance on the basis provided for in the
definition of LIBOR, Bank shall on such date give notice (by facsimile or by telephone confirmed in
writing) to Borrower of such determination, whereupon (i) no Term Loans may be made as, or
converted to, LIBOR Term Loans until such time as Bank notifies Borrower that the circumstances
giving rise to such notice no longer exist, and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Borrower with respect to Term Loans in respect of which such
determination was made shall be deemed to be rescinded by Borrower.




          (c) Compensation for Breakage or Non-Commencement of Interest Periods. Borrower shall
compensate Bank, upon written request by Bank (which request shall set forth the manner and method
of computing such compensation), for all losses, expenses, unrealized gains and liabilities
(including any interest paid by Bank to lenders of funds borrowed by it to make or carry its LIBOR
Term Loans, any loss, expense or liability incurred by Bank in connection with the liquidation or
re-employment of such funds, and, in the case of complete or partial principal payments or
conversions of LIBOR Term Loans prior to the last day of the applicable Interest Period, any amount
by which (A) the additional interest which would have been payable on the amount so prepaid or
converted had it not been paid or converted until the last day of the applicable Interest Period
exceeds (B) the interest which would have been recoverable by Bank by placing the amount so
received on deposit in the certificate of deposit markets, the offshore currency markets, or United
States Treasury investment products, as the case may be, for a period starting on the date on which
it was so paid or converted and ending on the last day of such Interest Period at the interest rate
determined by Bank in its reasonable discretion), if any, that Bank may incur: (i) if for any
reason (other than a default by Bank or due to any failure of Bank to fund LIBOR Term Loans due to
impracticability or illegality under Sections 3.7(c) and 3.7(d)) a borrowing or a conversion to or
continuation of any LIBOR Term Loan does not occur on a date specified in a Notice of Borrowing or
a Notice of Conversion/Continuation, as the case may be, or (ii) if for any reason (including
voluntary or mandatory prepayment or acceleration) any complete or partial principal payment or any
conversion of any of Borrower’s LIBOR Term Loans occurs on a date prior to the last day of an
Interest Period applicable to that Advance. Bank’s determination as to such amount shall be
conclusive absent manifest error.




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          (d) Assumptions Concerning Funding of LIBOR Term Loans. Calculation of all amounts
payable to Bank under this Section 3.6 and under Section 3.7 shall be made as though Bank had
actually funded each of its relevant LIBOR Term Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to the definition of LIBOR Rate in an amount equal
to the amount of such LIBOR Term Loan and having a maturity comparable to the relevant Interest
Period; provided, however, that Bank may fund each of its LIBOR Term Loans in any manner it sees
fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts
payable under this Section 3.6 and under Section 3.7.




          (e) LIBOR Term Loans After Default. After the occurrence and during the continuance
of an Event of Default, (i) Borrower may not elect to have a Credit Extension be made or continued
as, or converted to, a LIBOR Term Loan after the expiration of any Interest Period then in effect
for such Term Loan and (ii) subject to the provisions of Section 3.6(c), any Notice of
Conversion/Continuation given by Borrower with respect to a requested conversion/continuation that
has not yet occurred shall, at Bank’s option, be deemed to be rescinded by Borrower and be deemed a
request to convert or continue Term Loans referred to therein as Prime Rate Term Loans.




     3.7 Additional Requirements/Provisions Regarding LIBOR Term Loans.



     (a) Borrower shall pay Bank, upon demand by Bank, from time to time such amounts as Bank may
determine to be necessary to compensate it for any costs incurred by Bank that Bank determines are
attributable to its making or maintaining of any amount receivable by Bank hereunder in respect of
any LIBOR Term Loans relating thereto (such increases in costs and reductions in amounts receivable
being herein called “Additional Costs”), in each case resulting from any Regulatory Change which:



          (i) changes the basis of taxation of any amounts payable to Bank under this Agreement in
respect of any LIBOR Term Loans (other than changes which affect taxes measured by or imposed on
the overall net income of Bank by the jurisdiction in which Bank has its principal office);




          (ii) imposes or modifies any reserve, special deposit or similar requirements relating to any
extensions of credit or other assets of, or any deposits with, or other liabilities of Bank
(including any LIBOR Term Loans or any deposits referred to in the definition of LIBOR); or




          (iii) imposes any other condition affecting this Agreement (or any of such extensions of
credit or liabilities).




     Bank will notify Borrower of any event occurring after the Effective Date which will entitle
Bank to compensation pursuant to this Section 3.7(a) as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation. Bank will furnish Borrower with a
statement setting forth the basis and amount of each request by Bank for compensation under this
Section 3.7(a). Determinations and allocations by Bank for purposes of this Section 3.7(a) of the
effect of any Regulatory Change on its costs of maintaining its obligations to make LIBOR Term
Loans, of making or maintaining LIBOR Term Loans, or on amounts receivable by it in respect of
LIBOR Term Loans, and of the additional amounts required to compensate Bank in respect of any
Additional Costs, shall be conclusive absent manifest error.



     (b) If Bank shall determine that the adoption or implementation of any applicable law, rule,
regulation, or treaty regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central bank, or comparable
agency charged with the interpretation or administration thereof, or compliance by Bank (or its
applicable lending office) with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank, or comparable agency, has or would
have the effect of reducing the rate of return on capital of Bank or any person or entity
controlling Bank (a “Parent”) as a consequence of its obligations hereunder to a level below that
which Bank (or its Parent) could have achieved but for such adoption, change, or compliance (taking
into consideration policies with respect to capital adequacy) by an amount deemed by Bank to be
material, then from time to time, within five (5) Business Days after demand by Bank, Borrower
shall pay to Bank such additional amount or amounts as will compensate Bank for such reduction. A
statement of Bank claiming compensation under this Section 3.7(b) and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive absent manifest error.



     (c) If, at any time, Bank, in its sole and absolute discretion, determines that (i) the amount
of LIBOR Term Loans for periods equal to the corresponding Interest Periods are not available to
Bank in the offshore



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currency interbank markets, or (ii) LIBOR does not accurately reflect the cost to Bank of lending
the LIBOR Term Loans, then Bank shall promptly give notice thereof to Borrower. Upon the giving of
such notice, Bank’s obligation to make the LIBOR Term Loans shall terminate; provided, however,
LIBOR Term Loans shall not terminate if Bank and Borrower agree in writing to a different interest
rate applicable to LIBOR Term Loans.




     (d) If it shall become unlawful for Bank to continue to fund or maintain any LIBOR Term Loans,
or to perform its obligations hereunder, upon demand by Bank, Borrower shall prepay the LIBOR Term
Loans in full with accrued interest thereon and all other amounts payable by Borrower hereunder
(including, without limitation, any amount payable in connection with such prepayment pursuant to
Section 3.7(c)(ii)). Notwithstanding the foregoing, to the extent a determination by Bank as
described above relates to a LIBOR Term Loan then being requested by Borrower pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Borrower shall have the option, subject to the
provisions of Section 3.7(c)(ii), to (i) rescind such Notice of Borrowing or Notice of
Conversion/Continuation by giving notice (by facsimile or by telephone confirmed in writing) to
Bank of such rescission on the date on which Bank gives notice of its determination as described
above, or (ii) modify such Notice of Borrowing or Notice of Conversion/Continuation to obtain a
Prime Rate Term Loan or to have outstanding Term Loans converted into or continued as Prime Rate
Term Loans by giving notice (by facsimile or by telephone confirmed in writing) to Bank of such
modification on the date on which Bank gives notice of its determination as described above.



     4 CREATION OF SECURITY INTEREST



     4.1 Grant of Security Interest. Each Borrower hereby grants Bank, to secure the payment and
performance in full of all of the Obligations, a continuing security interest in, and pledges to
Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Each Borrower represents, warrants, and covenants that the security
interest granted herein is and shall at all times continue to be a first priority perfected
security interest in the Collateral (subject only to Permitted Liens that may have superior
priority to Bank’s Lien under this Agreement). If any Borrower shall acquire a commercial tort
claim, such Borrower shall promptly notify Bank in a writing signed by such Borrower of the general
details thereof and grant to Bank in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank.



     If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the
Obligations (other than inchoate indemnity obligations and obligations with respect to outstanding
Letters of Credit for which cash collateral has been provided pursuant to Section 2.1.2) are repaid
in full in cash. Upon payment in full in cash of such Obligations and at such time as Bank’s
obligation to make Credit Extensions has terminated, Bank shall, at Borrowers’ sole cost and
expense, release its Liens in the Collateral and all rights therein shall revert to Borrowers.



     Any assets that are sold or disposed of in a transaction permitted by Section 7.1 shall be
released from the Lien granted hereunder and shall no longer be part of the Collateral upon the
consummation of such transaction. Any Permitted Distributions (whether in the form of cash,
instruments or otherwise) properly made pursuant to Section 7.7 shall be released from the Lien
granted hereunder and shall no longer be part of the Collateral upon the making of such Permitted
Distribution.



     4.2 Authorization to File Financing Statements. Each Borrower hereby authorizes Bank to file
financing statements, without notice to Borrowers, with all appropriate jurisdictions to perfect or
protect Bank’s interest or rights hereunder, including a notice that any disposition of the
Collateral, by either Borrowers or any other Person, shall be deemed to violate the rights of Bank
under the Code.



     5 REPRESENTATIONS AND WARRANTIES



          Each Borrower represents and warrants as follows:




     5.1 Due Organization, Authorization; Power and Authority. Each Borrower is duly existing and
in good standing as a Registered Organization in its jurisdiction of formation and is qualified
and licensed to do business and is in good standing in any jurisdiction in which the conduct of
its business or its ownership of property requires that it be qualified except where the failure
to do so could not reasonably be expected to have a material adverse effect on Borrower’s
business. In connection with this Agreement, Borrower has delivered to Bank a completed
certificate signed by Borrower and Guarantor, respectively, entitled “Perfection Certificate”.
Borrower



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represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the
Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the
type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the
Perfection Certificate accurately sets forth Borrower’s organizational identification number or
accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth
Borrower’s place of business, or, if more than one, its chief executive office as well as
Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each
of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation,
organizational structure or type, or any organizational number assigned by its jurisdiction; and
(f) all other information set forth on the Perfection Certificate pertaining to Borrower and each
of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from
time to time update certain information in the Perfection Certificate after the Effective Date to
the extent permitted by one or more specific provisions in this Agreement). If Borrower is not now
a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such
occurrence and provide Bank with Borrower’s organizational identification number.




     The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational
documents, (ii) contravene, conflict with, constitute a default under or violate any material
Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by which Borrower or any
its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any
action by, filing, registration, or qualification with, or Governmental Approval from, any
Governmental Authority (except such Governmental Approvals which have already been obtained and
are in full force and effect or which can only be made or obtained in the future or (v) constitute
an event of default under any material agreement by which Borrower is bound. Borrower is not in
default under any agreement to which it is a party or by which it is bound in which the default
could reasonably be expected to have a material adverse effect on Borrower’s business.



     5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each
item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and
all Liens except Permitted Liens. Borrower has no Deposit Accounts other than the Deposit Accounts
with Bank, the Deposit Accounts, if any, described in the Perfection Certificate delivered to Bank
in connection herewith, or of which Borrower has given Bank notice and taken such actions as are
necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing
obligations of the Account Debtors.



     The Collateral is not in the possession of any third party bailee (such as a warehouse)
except for inventory located at printers from time to time and as otherwise provided in the
Perfection Certificate. None of the components of the Collateral shall be maintained at locations
other than as provided in the Perfection Certificate. In the event that Borrower, after the date
hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then
Borrower will first receive the written consent of Bank and such bailee must execute and deliver a
bailee agreement in form and substance satisfactory to Bank in its sole discretion.



     Borrower is the sole owner of its intellectual property, except for non-exclusive licenses
granted to its customers in the ordinary course of business. Each patent is valid and enforceable,
and no part of the intellectual property has been judged invalid or unenforceable, in whole or in
part, and to the best of Borrower’s knowledge, no claim has been made that any part of the
intellectual property violates the rights of any third party except to the extent such claim could
not reasonably be expected to have a material adverse effect on Borrower’s business. Except as
noted on the Perfection Certificate or as notified to Bank pursuant to the next sentence, Borrower
is not a party to, nor is bound by, any material license or other agreement (other than
over-the-counter software that is commercially available to the public) with respect to which
Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a
security interest in Borrower’s interest in such license or agreement or any other property, or
(b) for which a default under or termination of could interfere with the Bank’s right to sell any
Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or
becoming bound by any such license or agreement (other than over-the-counter software that is
commercially available to the public).



     5.3 Accounts Receivable. For any Eligible Account in any Borrowing Base Certificate, all
statements made and all unpaid balances appearing in all invoices, instruments and other documents
evidencing such Eligible Accounts are and shall be true and correct and all such invoices,
instruments and other documents, and all of Borrower’s Books are genuine and in all respects what
they purport to be. Whether or not an Event of Default has occurred and is continuing, Bank may,
during an audit of Eligible Accounts, notify any Account Debtor owing




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Borrower money of Bank’s security interest in such funds and verify the amount of such Eligible
Account. All sales and other transactions underlying or giving rise to each Eligible Account shall
comply in all material respects with all applicable laws and governmental rules and regulations.
Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor
whose accounts are Eligible Accounts in any Borrowing Base Certificate. To the best of Borrower’s
knowledge, all signatures and endorsements on all documents, instruments, and agreements relating
to all Eligible Accounts are genuine, and all such documents, instruments and agreements are
legally enforceable in accordance with their terms.




     5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of the
Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries in
which a likely adverse decision could reasonably be expected to cause a Material Adverse Change.



     5.5 No Material Deviation in Financial Statements. All consolidated financial statements
for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects
Borrower’s consolidated financial condition and Borrower’s consolidated results of operations.
There has not been any material deterioration in Borrower’s consolidated financial condition since
the date of the most recent financial statements submitted to Bank.



     5.6 Solvency. The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay
its debts (including trade debts) as they mature.



     5.7 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled”
by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not
engaged as one of its important activities in extending credit for margin stock (under Regulations
X, T and U of the Federal Reserve Board of Governors). Borrower has complied in all material
respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries is
a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a
“holding company” as each term is defined and used in the Public Utility Holding Company Act of
2005. Borrower has not violated any laws, ordinances or rules, the violation of which could
reasonably be expected to have a material adverse effect on its business. None of Borrower’s or
any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to
the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating,
or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries
have obtained all consents, approvals and authorizations of, made all declarations or filings with,
and given all notices to, all Government Authorities that are necessary to continue their
respective businesses as currently conducted except where the failure to do so could not reasonably
be expected to cause a Material Adverse Change.



     5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.



     5.9 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower, except that Borrower may defer payment of
any contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the
taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies
Bank in writing of the commencement of, and any material development in, the proceedings, and (c)
posts bonds or takes any other steps required to prevent the governmental authority from obtaining
a Lien upon any of the Collateral that is other than a “Permitted Lien”. Borrower is unaware of
any claims or adjustments proposed for any of Borrower’s prior tax years which could result in
additional taxes becoming due and payable by Borrower the payment of which could reasonably be
expected to cause a Material Adverse Change. Borrower has paid all amounts necessary to fund all
present pension, profit sharing and deferred compensation plans in accordance with their terms, and
Borrower has not withdrawn from participation in, and has not permitted partial or complete
termination of, or permitted the occurrence of any other event with respect to, any such plan which
could reasonably be expected to result in any liability of Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental agency.



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     5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as
working capital, to fund its general business requirements and to retire the Oak Hill Note, and not
for personal, family, household or agricultural purposes.



     5.11 Designation of Indebtedness under this Agreement as Senior Indebtedness.



     All principal of, interest (including all interest accruing after the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowable
as a claim in any such proceeding), and all fees, costs, expenses and other amounts accrued or due
under this Agreement shall constitute “Designated Senior Indebtedness” under the terms of any
applicable debt instrument.



     5.12 Full Disclosure. No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Bank, as of the date such representation, warranty,
or other statement was made, taken together with all such written certificates and written
statements given to Bank, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the certificates or statements not
misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in
good faith and based upon reasonable assumptions are not viewed as facts and that actual results
during the period or periods covered by such projections and forecasts may differ from the
projected or forecasted results).



     6 AFFIRMATIVE COVENANTS



     Each Borrower shall do all of the following:




     6.1 Government Compliance.



          (a) Maintain its and all its Subsidiaries’ legal existence and good standing in their
respective jurisdictions of formation and maintain qualification in each jurisdiction in which the
failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s
business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws,
ordinances and regulations to which it is subject, noncompliance with which could have a material
adverse effect on Borrower’s business.




          (b) Obtain all of the Governmental Approvals necessary for the performance by Borrower of its
obligations under the Loan Documents to which it is a party and the grant of a security interest to
Bank in all of its property. Borrower shall promptly provide copies of any such obtained
Governmental Approvals to Bank.




     6.2 Financial Statements, Reports, Certificates.



          (a) Deliver to Bank: (i) as soon as available, but no later than the earlier of (A) five (5)
days after filing with the Securities Exchange Commission (“SEC”) or (B) if no such filing is made,
50 days after each fiscal quarter end and 95 days after each fiscal year end; financial statements;
(ii) a Compliance Certificate together with delivery of the 10K and 10Q reports; (iii) within 45
days after the end of each fiscal year, annual financial projections for the following fiscal year
(on a quarterly basis) as approved by Borrower’s board of directors, together with any related
business forecasts used in the preparation of such annual financial projections; (iv) after
Borrower obtains actual knowledge thereof, a prompt report of any legal actions pending or
threatened in writing against Borrower or any Subsidiary that could result in damages or costs to
Borrower or any Subsidiary of $250,000 or more; and (v) budgets, sales projections, operating plans
or other financial information Bank reasonably requests.




     Borrower’s 10K, 10Q, and 8K reports required to be delivered pursuant to Section 6.2(a)(i)
shall be deemed to have been delivered on the date on which Borrower posts such report or provides
a link thereto on Borrower’s or another website on the Internet; provided, that Borrower
shall provide paper copies to Bank of the Compliance Certificates required by Section 6.2(a)(ii).



          (b) When the total amount of Advances plus the face amount of outstanding Letters of Credit is
greater than $1,500,000, and within thirty (30) days after the last day of each month, deliver to
Bank a (i) duly completed Borrowing Base Certificate signed by a Responsible Officer, with aged
listings of accounts receivable and accounts payable (by invoice date) and (ii) a deferred revenue
report.




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          (c) Monthly financial statements, within 30 days after the last day of each month, and as soon
as available, and in any event within 150 days following the end of Borrower’s fiscal year, annual
financial statements certified by, and with an unqualified opinion of, independent certified public
accountants acceptable to Bank.




          (d) Together with delivery of financial statements pursuant to Section 6.2(a) and (c) above,
deliver to Bank a duly completed Compliance Certificate signed by a Responsible Officer setting
forth calculations showing compliance with the financial covenants set forth in this Agreement.




          (e) Allow Bank to audit Borrower’s Collateral at Borrower’s expense. Such audits shall be
conducted no more often than once every twelve (12) months at Borrower’s expense unless an Event of
Default has occurred and is continuing.




     6.3 Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely file, all
required tax returns and reports and timely pay, and require each of its Subsidiaries to timely
file, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by
Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant
to the terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates
attesting to such payments, and pay all amounts necessary to fund all present pension, profit
sharing and deferred compensation plans in accordance with their terms.



     6.4 Insurance. Keep its business and the Collateral insured for risks and in amounts
standard for companies in Borrower’s industry and location and as Bank may reasonably request.
Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to
Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as the an
additional lender loss payee and waive subrogation against Bank, and all liability policies shall
show, or have endorsements showing, Bank as an additional insured. All policies (or the loss
payable and additional insured endorsements) shall provide that the insurer shall endeavor to give
Bank at least twenty (20) days’ notice before canceling, amending, or declining to renew its
policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all
premium payments. If Borrower fails to obtain insurance as required under this Section 6.4 or to
pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make
all or part of such payment or obtain such insurance policies required in this Section 6.4, and
take any action under the policies Bank reasonably deems prudent.



     6.5 Operating Accounts.



          (a) Maintain all of its and all of its Subsidiaries’ primary and its Subsidiaries’ primary
operating and, except as permitted in Section 6.5(b), other Deposit Accounts and securities
accounts with Bank and Bank’s Affiliates.




          (b) Provide Bank five (5) days’ prior written notice before establishing any Collateral
Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For
each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable
bank or financial institution (other than Bank) at or with which any Collateral Account is
maintained to execute and deliver a Control Agreement or other appropriate instrument with respect
to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the
terms hereunder. The provisions of the previous sentence shall not apply to Deposit Accounts
exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of Borrower’s employees and identified to Bank by Borrower as such.




     6.6 Financial Covenants.



          (a) Borrower shall maintain at all times, to be tested as of the last day of each month
unless otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries:




               (i) Adjusted Quick Ratio. A ratio of (1) Quick Assets to (2) the sum of (x) Current
Liabilities plus (y) all Advances and Term Loans minus (z) Deferred Revenue, of at least 1.15 to
1.0 through September 30, 2009, and at least 1.25:1.00 thereafter.




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               (ii) Maximum Unfunded Capital Expenditures. Borrowers’ capital expenditures
made in cash and not financed with indebtedness shall not exceed $2,000,000 in the fiscal year
ending in 2009, and $4,000,000 in any fiscal year thereafter.



          (b) Borrower shall maintain at all times, to be tested as of the last day of each quarter
unless otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries:




               (i) Minimum EBITDA. Borrower shall achieve EBITDA of no less
than the amounts set forth below for each specified period.



	 	 	 	 	 
	Period	 	Minimum EBITDA
	For the fiscal quarter ending March 31, 2009
	 	$	750,000	 
	For the fiscal quarter ending June 30, 2009
	 	$	750,000	 






               (ii) Minimum Fixed Charge Coverage. Borrower shall achieve a Fixed Charge
Coverage Ratio of no less than the amounts set forth below for each specified period.



	 	 	 	 	 
	Period	 	Minimum Fixed Charge Coverage Ratio
	For the fiscal quarter ending September 30, 2009
	 	 	1.50:1.00	 
	For the fiscal quarter ending December 31, 2009
	 	 	2.00:1.00	 
	For the fiscal quarter ending March 31, 2010
	 	 	1.50:1.00	 
	For the fiscal quarter ending June 30, 2010
	 	 	2.00:1.00	 
	For the fiscal quarters ending September 30, 2010
and thereafter
	 	 	2.50:1.00	 






     6.7 Protection and Registration of Intellectual Property Rights.
Borrower shall: (a) protect, defend and maintain the validity and enforceability of
its intellectual property where the failure to do so would result in a Material Adverse Change;
(b) promptly advise Bank in writing of material infringements of its intellectual property; and (c) not
allow any intellectual property to be abandoned, forfeited or dedicated to the public without Bank’s written consent where
such abandonment, forfeiture or dedication would have a Material Adverse Change. If Borrower (i) obtains any patent, registered
trademark or servicemark, registered copyright, registered mask work, or any pending application for any of the foregoing, whether
as owner, licensee or otherwise, or (ii) applies for any patent or the registration of any trademark or servicemark, then Borrower
shall on its next Compliance Certificate notify Bank thereof and shall execute such intellectual property security agreements and other
documents and take such other actions as Bank shall request in its good faith business judgment to perfect and maintain a first
priority perfected security interest in favor of Bank in such property. If Borrower decides to register any copyrights or mask works
in the United States Copyright Office, Borrower shall: (x) provide Bank with at least fifteen (15) days’ prior written notice (which may
be in the form of a Compliance Certificate) of Borrower’s intent to register such copyrights or mask works together with a copy of the
application it intends to file with the United States Copyright Office (excluding exhibits
thereto); (y) execute an intellectual property security agreement and such other documents
and take such other actions as Bank may request in its good faith business judgment to perfect
and maintain a first priority perfected security interest in favor of Bank in the copyrights or
mask works intended to be registered with the United States Copyright Office; and (z) record such
intellectual property security agreement with the United States Copyright Office contemporaneously
with filing the copyright or mask work application(s) with the United States Copyright Office. Borrower
shall promptly provide to Bank copies of all applications that it files



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for patents or for the registration of trademarks, servicemarks, copyrights or mask works,
together with evidence of the recording of the intellectual property security agreement
necessary for Bank to perfect and maintain a first priority perfected security interest in
such property.




     6.8 Litigation Cooperation. From the date hereof and continuing through the
termination of this Agreement, make available to Bank, without expense to Bank, Borrower and
its officers, employees and agents and Borrower’s books and records, to the extent that Bank
may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding
instituted by or against Bank with respect to any Collateral or Borrower.



     6.9 Further Assurances. Execute any further instruments and take further action as
Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect
the purposes of this Agreement. Deliver to Bank, within five (5) days after the same are
sent or received, copies of all correspondence, reports, documents and other filings with
any Governmental Authority regarding compliance with or maintenance of Governmental
Approvals or Requirements of Law or that could reasonably be expected to have a material
effect on any of the Governmental Approvals or otherwise on the operations of Borrower or
any of its Subsidiaries.



     7 NEGATIVE COVENANTS



     No Borrower shall not do any of the following without Bank’s prior written consent:



     7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of
(collectively “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, except for:



          (a) Transfers in the ordinary course of business for reasonably equivalent
consideration;




          (b) Transfers to a Borrower or any of its Subsidiaries from a Borrower or any of its
Subsidiaries;




          (c) Transfers of property in connection with sale-leaseback transactions;




          (d) Transfers of property to the extent such property is exchanged for credit
against, or proceeds are promptly applied to, the purchase price of other property used or
useful in the business of Borrower or its Subsidiaries;




          (e) Transfers constituting non-exclusive licenses and similar arrangements for the
use of the property of Borrower or its Subsidiaries in the ordinary course of business and
other non-perpetual licenses that may be exclusive in some respects other than territory
(and/or that may be exclusive as to territory only in discreet geographical areas outside of
the United States), but that could not result in a legal transfer of Borrower’s title in the
licensed property;




          (f) Transfers otherwise permitted by the Loan Documents;




          (g) sales or
discounting of delinquent accounts in the ordinary course of business;




          (h) Transfers
associated with the making or disposition of a Permitted Investment; and




          (i) Transfers in connection with a permitted acquisition of a portion of the assets
or rights acquired.




     7.2 Changes in Business; Change in Control; Jurisdiction of Formation.



     Engage in any material line of business other than those lines of business conducted by
Borrower and its Subsidiaries on the date hereof and any businesses reasonably related,
complementary or incidental thereto or reasonable extensions thereof; permit or suffer any
Change in Control. Borrower will not, without prior written notice, change its
jurisdiction of formation.



     7.3 Mergers or Acquisitions.



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     Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any Person
other than with Borrower or any Subsidiary, or acquire, or permit any of its Subsidiaries to
acquire, all or substantially all of the capital stock or property of a Person other than
Borrower or any Subsidiary, except where no Event of Default has occurred and is continuing or
would result from such action during the term of this Agreement, and (a) Borrower is the
surviving entity, (b) such merger or consolidation is a Transfer otherwise permitted pursuant to
Section 7.1 hereof, or (c) such merger is in connection with an initial public offering and is
the means by which Borrowing re-incorporates in Delaware.



     7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.



     7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of the Collateral, or
assign or convey any right to receive income, including the sale of any Accounts, or permit any
of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject
to the first priority security interest granted herein, or enter into any agreement, document,
instrument or other arrangement (except with or in favor of Bank) with any Person which directly
or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from
assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of
Borrower’s or any Subsidiary’s intellectual property, except as is otherwise permitted in Section
7.1 hereof and the definition of “Permitted Lien” herein.



     7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant
to the terms of Section 6.4.(b) hereof.



     7.7 Distributions; Investments. (a) Pay any dividends or make any distribution or payment
or redeem, retire or purchase any capital stock other than Permitted Distributions; or (b)
directly or indirectly acquire or own any Person, or make any Investment in any Person, other
than Permitted Investments, or permit any of its Subsidiaries to do so.



     7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist
any material transaction with any Affiliate of Borrower except for (a) transactions that are in
the ordinary course of Borrower’s business, upon fair and reasonable terms (when viewed in the
context of any series of transactions of which it may be a part, if applicable) that are no less
favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person; or (b) transactions among Borrower and its Subsidiaries and among Borrower’s Subsidiaries
so long as no Event of Default exists or could result therefrom.



     7.9 Subordinated Debt. Make or permit any payment on or amendments of any Subordinated
Debt, except (a) payments pursuant to the terms of the Subordinated Debt; (b) payments made with
Borrower’s capital stock or other Subordinated Debt; (c) amendments to Subordinated Debt so long
as such Subordinated Debt remains subordinated in right of payment to this Agreement and any
Liens securing such Subordinated Debt remain subordinate in priority to Bank’s Lien hereunder; or
(d) other purchases or payments of Subordinated Debt.



     7.10 Compliance. Become an “investment company” or a company controlled by an “investment
company”, under the Investment Company Act of 1940, as amended, or undertake as one of its
important activities extending credit to purchase or carry margin stock (as defined in Regulation
U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit
Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with
the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation
could reasonably be expected to have a material adverse effect on Borrower’s business, or permit
any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from
participation in, permit partial or complete termination of, or permit the occurrence of any
other event with respect to, any present pension, profit sharing and deferred compensation plan
which could reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental
agency.



     8 EVENTS OF DEFAULT



     Any one of the following shall constitute an event of default (an “Event of Default”) under this
Agreement:



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     8.1 Payment Default. Borrowers fail to (a) make any payment of principal or interest on
any Credit Extension on its due date, or (b) pay any other Obligations within three (3)
Business Days after such Obligations are due and payable (which three (3) day grace period
shall not apply to payments due on the Revolving Line Maturity Date). During the cure period,
the failure to cure the payment default is not an Event of Default (but no Credit Extension
will be made during the cure period);



     8.2 Covenant Default.



          (a) Borrowers fail or neglect to perform any obligation in Sections 6.2 (a), (b), (c) or (d),
6.5, or violates any covenant in Section 7; or




          (b) Borrowers fail or neglect to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to
any default (other than those specified in this Section 8) under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the default within ten
(10) days after the occurrence thereof; provided, however, that if the default cannot by its
nature be cured within the ten (10) day period or cannot after diligent attempts by Borrowers
be cured within such ten (10) day period, and such default is likely to be cured within a
reasonable time, then Borrowers shall have an additional period (which shall not in any case
exceed thirty (30) days) to attempt to cure such default, and within such reasonable time
period the failure to cure the default shall not be deemed an Event of Default (but no Credit
Extensions shall be made during such cure period). Grace periods provided under this section
shall not apply, among other things, to financial covenants or any other covenants set forth in
subsection (a) above;




     8.3 Intentionally Omitted;



     8.4 Attachment; Levy; Restraint on Business. (a) (i) The service of process seeking to
attach, by trustee or similar process, any funds of any Borrower or of any entity under control
of any Borrower (including a Subsidiary) on deposit with Bank or any Bank Affiliate, or (ii) a
notice of lien, levy, or assessment is filed against any of any Borrower’s assets by any
government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10)
Business Days after the occurrence thereof, discharged or stayed (whether through the posting
of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten
(10) Business Day cure period; and (b) (i) any material portion of such Borrower’s assets is
attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any
court order enjoins, restrains, or prevents such Borrower from conducting any part of its
business;



     8.5 Insolvency. (a) Any Borrower is unable to pay its debts (including trade debts) as
they become due or otherwise becomes insolvent; (b) any Borrower begins an Insolvency
Proceeding; or (c) an Insolvency Proceeding is begun against any Borrower and not dismissed or
stayed within thirty (30) days (but no Credit Extensions shall be made while of any of the
conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);



     8.6 Other Agreements. If any Borrower fails to (a) make any payment that is due and
payable with respect to any Material Indebtedness and such failure continues after the
applicable grace or notice period, if any, specified in the agreement or instrument relating
thereto, or (b) perform or observe any other condition or covenant, or any other event shall
occur or condition exist under any agreement or instrument relating to any Material
Indebtedness, and such failure continues after the applicable grace or notice period, if any,
specified in the agreement or instrument relating thereto and the effect of such failure, event
or condition is to cause the holder or holders of such Material Indebtedness to accelerate the
maturity of such Material Indebtedness or cause the mandatory repurchase of any Material
Indebtedness;



     8.7 Judgments. One or more judgments, orders, or decrees for the payment of money in
an amount, individually or in the aggregate, of at least Two Hundred and Fifty Thousand Dollars
($250,000) (not covered by independent third-party insurance as to which liability has been
accepted by such insurance carrier) shall be rendered against any Borrower and shall remain
unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof
(provided that no Credit Extensions will be made prior to the satisfaction, vacation, or stay
of such judgment, order, or decree);



     8.8 Misrepresentations. Any Borrower or any Person acting for any Borrower makes any
representation, warranty, or other statement now or later in this Agreement, any Loan Document
or in any writing



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delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incorrect in any material respect when made;




     8.9 Subordinated Debt. Any creditor of Borrowers that has signed a subordination,
intercreditor, or similar agreement with Bank breaches any terms of such agreement;



     8.10 Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason
to be in full force and effect; (b) any Guarantor does not perform any material obligation or
covenant under any guaranty of the Obligations; (c) any circumstance described in Sections
8.3, 8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor, or (d) the liquidation,
winding up, or termination of existence of any Guarantor; or (e) (i) a material impairment in
the perfection or priority of Bank’s Lien in the collateral provided by Guarantor or in the
value of such collateral or (ii) a material adverse change in the general affairs, management,
results of operation, condition (financial or otherwise) or the prospect of repayment of the
Obligations occurs with respect to any Guarantor; or



     8.11 Governmental Approvals. Any Governmental Approval shall have been (a) revoked,
rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for
a full term and such revocation, rescission, suspension, modification or non-renewal has, or
could reasonably be expected to have, a Material Adverse Change; or (b) subject to any
decision by a Governmental Authority that designates a hearing with respect to any
applications for renewal of any of such Governmental Approval or that could result in the
Governmental Authority taking any of the actions described in clause (a) above, and such
decision or such revocation, rescission, suspension, modification or non-renewal has, or could
reasonably be expected to have, a Material Adverse Change.



     9
BANK’S RIGHTS AND REMEDIES



     9.1 Rights and Remedies. While an Event of Default occurs and continues Bank
may, without notice or demand, do any or all of the following:



          (a) declare all Obligations immediately due and payable (but if an Event of Default
described in Section 8.5 occurs all Obligations are immediately due and payable without any
action by Bank);




          (b) stop advancing money or extending credit for Borrowers’ benefit under this
Agreement or under any other agreement between Borrowers and Bank;




          (c) demand that Borrowers (i) deposit cash with Bank in an amount equal to the
aggregate amount of any Letters of Credit remaining undrawn, as collateral security for the
repayment of any future drawings under such Letters of Credit, and Borrowers shall forthwith
deposit and pay such amounts, and (ii) pay in advance all Letter of Credit fees scheduled to
be paid or payable over the remaining term of any Letters of Credit;




          (d) terminate any FX Forward Contracts;




          (e) settle or adjust disputes and claims directly with Account Debtors for amounts on
terms and in any order that Bank considers advisable, notify any Person owing Borrowers money
of Bank’s security interest in such funds, and verify the amount of such account;




          (f) make any payments and do any acts it considers necessary or reasonable to protect
the Collateral and/or its security interest in the Collateral. Borrowers shall assemble the
Collateral if Bank requests and make it available as Bank designates. Bank may enter premises
where the Collateral is located, take and maintain possession of any part of the Collateral,
and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to
its security interest and pay all expenses incurred. Each Borrower grants Bank a license to
enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or
remedies;




          (g) apply to the Obligations any (i) balances and deposits of Borrowers it holds, or
(ii) any amount held by Bank owing to or for the credit or the account of Borrowers;




          (h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell the Collateral. Bank is hereby granted a non-exclusive,
royalty-free license or other right to use, without charge, Borrowers’ labels, patents,
copyrights, mask works, rights of use of any name, trade secrets, trade names,




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trademarks, service marks, and advertising matter, or any similar property as it pertains to
the Collateral, in completing production of, advertising for sale, and selling any Collateral
and, in connection with Bank’s exercise of its rights under this Section, Borrowers’ rights
under all licenses and all franchise agreements inure to Bank’s benefit;




          (i) place a “hold” on any account maintained with Bank and/or deliver a notice of
exclusive control, any entitlement order, or other directions or instructions pursuant to any
Control Agreement or similar agreements providing control of any Collateral;




          (j) demand and receive possession of Borrowers’ Books; and




          (k) exercise all rights and remedies available to Bank under the Loan Documents or at
law or equity, including all remedies provided under the Code (including disposal of the
Collateral pursuant to the terms thereof).




     9.2 Power of Attorney. Each Borrower hereby irrevocably appoints Bank as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse such Borrower’s name on any checks or other forms of payment or
security; (b) sign such Borrower’s name on any invoice or bill of lading for any Account or
drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts
directly with Account Debtors, for amounts and on terms Bank determines reasonable; (d) make,
settle, and adjust all claims under such Borrower’s insurance policies; (e) pay, contest or
settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the
Collateral, or any judgment based thereon, or otherwise take any action to terminate or
discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as
the Code permits. Each Borrower hereby appoints Bank as its lawful attorney-in-fact to sign
Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s
security interest in the Collateral regardless of whether an Event of Default has occurred
until all Obligations have been satisfied in full and Bank is under no further obligation to
make Credit Extensions hereunder. Bank’s foregoing appointment as each Borrower’s attorney in
fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all
Obligations other than inchoate indemnity obligations and obligations with respect to
outstanding Letters of Credit for which cash collateral has been provided pursuant to Section
2.1.2) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions
terminates.



     9.3 Protective Payments. If any Borrower fails to obtain the insurance called for by
Section 6.3 or fails to pay any premium thereon or fails to pay any other amount which
Borrowers is obligated to pay under this Agreement or any other Loan Document, Bank may obtain
such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then highest applicable rate, and secured
by the Collateral. Bank will make reasonable efforts to provide Borrowers with notice of Bank
obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No
payments by Bank are deemed an agreement to make similar payments in the future or Bank’s
waiver of any Event of Default.



     9.4 Application of Payments and Proceeds. Unless an Event of Default has occurred and
is continuing, Bank shall apply any funds in its possession, whether from Borrower account
balances, payments, or proceeds realized as the result of any collection of Accounts or other
disposition of the Collateral, first, to Bank Expenses, including without limitation, the
reasonable costs, expenses, liabilities, obligations and attorneys’ fees incurred by Bank in
the exercise of its rights under this Agreement; second, to the interest due upon any of the
Obligations; and third, to the principal of the Obligations and any applicable fees and other
charges in such order as Bank shall determine in its sole discretion. Any surplus shall be paid
to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Bank for
any deficiency. If an Event of Default has occurred and is continuing, Bank may apply any
funds in its possession, whether from Borrowers’ account balances, payments, proceeds realized
as the result of any collection of Accounts or other disposition of the Collateral, or
otherwise, to the Obligations in such order as Bank shall determine in its sole discretion. Any
surplus shall be paid to Borrowers or other Persons legally entitled thereto; Borrower shall
remain liable to Bank for any deficiency. If Bank, in its good faith business judgment,
directly or indirectly enters into a deferred payment or other credit transaction with any
purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of
either reducing the Obligations by the principal amount of the purchase price or deferring the
reduction of the Obligations until the actual receipt by Bank of cash therefor.




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     9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable
banking practices regarding the safekeeping of the Collateral in the possession or under the
control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.
Borrowers bear all risk of loss, damage or destruction of the Collateral.



     9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to
require strict performance by Borrowers of any provision of this Agreement or any other Loan
Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict
performance and compliance herewith or therewith. No waiver hereunder shall be effective
unless signed by Bank and then is only effective for the specific instance and purpose for
which it is given. Bank’s rights and remedies under this Agreement and the other Loan
Documents are cumulative. Bank has all rights and remedies provided under the Code, by law,
or in equity. Bank’s exercise of one right or remedy is not an election, and Bank’s waiver of
any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not
a waiver, election, or acquiescence.



     9.7 Demand Waiver. Each Borrower waives demand, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel
paper, and guarantees held by Bank on which Borrowers are liable.



     10 NOTICES



     All notices, consents, requests, approvals, demands, or other communication by any party to
this Agreement or any other Loan Document must be in writing and shall be deemed to have been
validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the U.S. mail, first class, registered or certified mail return
receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic
mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent to the address,
facsimile number, or email address indicated below. Bank or any Borrower may change its mailing
or electronic mail address or facsimile number by giving the other party written notice thereof
in accordance with the terms of this Section 10.



	 	 	 
	If to Borrower:

	 	Financial Engines, Inc.
	 

	 	1804 Embarcadero Rd., Suite 200
	 

	 	Palo Alto, CA 94303
	 

	 	Attn: Raymond J. Sims
	 

	 	Fax: 650-565-7705
	 

	 	Email: rsims@financialengines.com
	 
	 	 
	 

	 	Financial Engines Reincorporation Sub, Inc.
	 

	 	1804 Embarcadero Rd.
	 

	 	Palo Alto, CA 94303
	 

	 	Attn: Raymond J. Sims
	 

	 	Fax: 650-565-7705
	 

	 	Email: rsims@financialengines.com
	 
	 	 
	If to Bank:

	 	Silicon Valley Bank
	 

	 	2400 Hanover Street
	 

	 	Palo Alto, CA 94304
	 

	 	Attn: Nick Tsiagkas
	 

	 	Fax: (650) 320-0016
	 

	 	Email: ntsiagkas@svb.com






     11
CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE



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     California law governs the Loan Documents without regard to principles of conflicts of law.
Borrowers and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed
to operate to preclude Bank from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce
a judgment or other court order in favor of Bank. Each Borrower expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such court, and each Borrower
hereby waives any objection that it may have based upon lack of personal jurisdiction, improper
venue, or forum non conveniens and hereby consents to the granting of such legal or equitable
relief as is deemed appropriate by such court. Each Borrower hereby waives personal service of the
summons, complaints, and other process issued in such action or suit and agrees that service of
such summons, complaints, and other process may be made by registered or certified mail addressed
to Borrowers at the address set forth in Section 10 of this Agreement and that service so made
shall be deemed completed upon the earlier to occur of Borrowers’ actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid.



     TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWERS AND BANK EACH WAIVE THEIR RIGHT
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE
LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.



     WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT
TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the
parties hereto agree that any and all disputes or controversies of any nature between them arising
at any time shall be decided by a reference to a private judge, mutually selected by the parties
(or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior
Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to
comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the
federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby
submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to
and in accordance with the provisions of California Code of Civil
Procedure §§ 638 through 645.1,
inclusive. The private judge shall have the power, among others, to grant provisional relief,
including without limitation, entering temporary restraining orders, issuing preliminary and
permanent injunctions and appointing receivers. All such proceedings shall be closed to the public
and confidential and all records relating thereto shall be permanently sealed. If during the course
of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at
that point pursuant to the judicial reference procedures, then such party may apply to the Santa
Clara County, California Superior Court for such relief. The proceeding before the private judge
shall be conducted in the same manner as it would be before a court under the rules of evidence
applicable to judicial proceedings. The parties shall be entitled to discovery which shall be
conducted in the same manner as it would be before a court under the rules of discovery applicable
to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery
rules and order applicable to judicial proceedings in the same manner as a trial court judge. The
parties agree that the selected or appointed private judge shall have the power to decide all
issues in the action or proceeding, whether of fact or of law, and shall report a statement of
decision thereon pursuant to the California Code of Civil Procedure § 644(a). Nothing in this
paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose
against collateral, or obtain provisional remedies. The private judge shall also determine all
issues relating to the applicability, interpretation, and enforceability of this paragraph.



     12 GENERAL PROVISIONS



     12.1 Successors and Assigns. This Agreement binds and is for the benefit of the successors
and
permitted assigns of each party. Borrowers may not assign this Agreement or any rights or
obligations under it
without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion).
Bank has the right,
without the consent of or notice to Borrowers, to sell, transfer, negotiate, or grant
participation in all or any part of,
or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the
other Loan Documents.



     12.2 Indemnification. Borrowers agree to indemnify, defend and hold Bank and its directors,
officers,
employees, agents, attorneys, or any other Person affiliated with or representing Bank (each,
an “Indemnified
Person”) harmless against: (a) all obligations, demands, claims, and liabilities
(collectively, “Claims”) asserted by
any other party in connection with the transactions contemplated by the Loan Documents; and
(b) all losses or Bank



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Expenses incurred, or paid by such Indemnified Person from, following, or arising from
transactions between Bank and Borrowers (including reasonable attorneys’ fees and expenses),
except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or
willful misconduct.



     12.3 Time of Essence. Time is of the essence for the performance of all Obligations in this
Agreement.



     12.4 Severability of Provisions. Each provision of this Agreement is severable from every other
provision in determining the enforceability of any provision.



     12.5 Correction of Loan Documents. Bank may correct patent errors and fill in any blanks in this
Agreement and the other Loan Documents consistent with the agreement of the parties.



     12.6 Amendments in Writing; Integration. All amendments to this Agreement must be in writing
and signed by both Bank and Borrowers. This Agreement and the Loan Documents represent the
entire agreement
about this subject matter and supersede prior negotiations or agreements. All prior
agreements, understandings,
representations, warranties, and negotiations between the parties about the subject matter of
this Agreement and the
Loan Documents merge into this Agreement and the Loan Documents.



     12.7 Counterparts. This Agreement may be executed in any number of counterparts and by
different
parties on separate counterparts, each of which, when executed and delivered, are an original,
and all taken together,
constitute one Agreement.



     12.8 Survival. All covenants, representations and warranties made in this Agreement continue
in full
force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity
obligations and any other obligations which, by their terms, are to survive the termination of
this Agreement) have
been satisfied. The obligation of Borrowers in Section 12.2 to indemnify Bank shall survive
until the statute of
limitations with respect to such claim or cause of action shall have run.



     12.9 Confidentiality. In handling any confidential information, Bank shall exercise the same
degree of
care that it exercises for its own proprietary information, but disclosure of information may
be made: (a) to Bank’s
Subsidiaries or Affiliates in connection with their business with Borrower; (b) to prospective
transferees or
purchasers of any interest in the Credit Extensions (provided, however, Bank shall use
commercially reasonable
efforts to obtain such prospective transferee’s or purchaser’s agreement to the terms of this
provision); (c) as
required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as
otherwise required in connection
with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies
under the Loan
Documents; and (f) to third-party service providers of Bank so long as such service providers
have executed a
confidentiality agreement with Bank for the benefit of Borrower with terms no less restrictive
than those contained
herein. Confidential information does not include information that either: (i) is in the
public domain or in Bank’s
possession when disclosed to Bank, or becomes part of the public domain after disclosure to
Bank; or (ii) is
disclosed to Bank by a third party, if Bank does not know that the third party is prohibited
from disclosing the
information.



     12.10 Co-Borrower Waivers.



     (a) Cross-Guaranty. Each Borrower hereby agrees that such Borrower is jointly and
severally liable for, and hereby absolutely and unconditionally guarantees to Bank and its
successors and assigns, the full and prompt payment (whether at stated maturity, by acceleration
or otherwise) and performance of, all Obligations owed or hereafter owing to Bank by each other
Borrower. Each Borrower agrees that its guaranty obligation hereunder is a continuing guaranty of
payment and performance and not of collection, that its obligations under this Agreement shall not
be discharged until payment and performance, in full, of the Obligations has occurred, and that
its obligations under this Section 12.10 shall be absolute and unconditional, irrespective of, and
unaffected by,



     (i) the genuineness, validity, regularity, enforceability or any future amendment of, or
change in, this
Agreement, any other Loan Document or any other agreement, document or instrument to which any
Borrower is or may become a party;



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     (ii) the absence of any action to enforce this Agreement (including this Section 12.10) or any
other Loan Document or the waiver or consent by Bank with respect to any of the provisions thereof;



     (iii) the existence, value or condition of, or failure to perfect its Lien against, any
security for the Obligations or any action, or the absence of any action, by Bank in respect
thereof (including the release of any such security);



     (iv) the insolvency of any Borrower or any Guarantor; or



     (v) any other action or circumstances that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.



     Each Borrower shall be regarded, and shall be in the same position, as the principal debtor
with respect to the Obligations guaranteed hereunder.



     (b) Specific Waivers by Borrowers. Each Borrower expressly waives all rights it may
have now or in
the future under any statute, or at common law, or at law or in equity, or otherwise, to
compel Bank to marshal
assets or to proceed in respect of the Obligations guaranteed hereunder against any other
Borrower or any
Guarantor, any other party or against any security for the payment and performance of the
Obligations before
proceeding against, or as a condition to proceeding against, such Borrower. Without limiting
the generality of the
foregoing, each Borrower expressly waives the benefit of California Civil Code Section 2815
permitting the
revocation of any guaranty as to future transactions and the benefit of California Civil Code
Sections 2787 through
2855, 2899 and 1432 with respect to certain suretyship defenses. It is agreed among each
Borrower and Bank that
the foregoing waivers are of the essence of the transaction contemplated by this Agreement and
the other Loan
Documents and that, but for the provisions of this Section 12.10 and such waivers, Bank would
decline to enter into
this Agreement.



     (c) Benefit of Guaranty. Each Borrower agrees that the provisions of this Section
12.10 are for the
benefit of Bank and its successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as
between any other Borrower and Bank, the obligations of such other Borrower under the Loan
Documents.



     (d) Waiver of Subrogation. Etc. Notwithstanding anything to the contrary in this
Agreement or in any
other Loan Document or until all obligations are paid in full, each Borrower hereby expressly
and irrevocably
waives any and all rights at law or in equity to subrogation, reimbursement, exoneration,
contribution,
indemnification or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor.
Each Borrower acknowledges and agrees that this waiver is intended to benefit Bank and shall
not limit or otherwise
affect such Borrower’s liability hereunder or the enforceability of this Section 12.10, and
that Bank and its
successors and assigns are intended third party beneficiaries of the waivers and agreements
set forth in this Section 12.10.



     12.11 Attorneys’ Fees, Costs and Expenses. In any action or proceeding between Borrowers and
Bank arising out of or relating to the Loan Documents, the prevailing party shall be entitled to
recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any
other relief to which it may be entitled.



     13 DEFINITIONS



     13.1 Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word
“may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not
limiting, the singular includes the plural, and numbers denoting amounts that are set off in
brackets are negative. As used in this Agreement, the following terms have the following meanings:



     “Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.



     “Account Debtor” is any “account debtor” as defined in the Code with such additions to such
term as may hereafter be made.



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     “Advance” or “Advances” means an advance (or advances) under the Revolving Line.



     “Affiliate” of any Person is a Person that owns or controls directly or indirectly the
Person, any Person that controls or is controlled by or is under common control with the Person,
and each of that Person’s senior executive officers, directors, partners and, for any Person that
is a limited liability company, that Person’s managers and members.



     “Agreement” is defined in the preamble hereof.



     “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount
available under the Borrowing Base minus (b) the amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of Credit
Reserve, minus (c) the FX Reserve, minus (d) any outstanding amounts used for Cash Management
Services, and minus (e) the outstanding principal balance of any Advances.



     “Bank” is defined in the preamble hereof.



     “Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable
attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and
enforcing the Loan Documents (including, without limitation, those incurred in connection with
appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.



     “Bankruptcy-Related Defaults” is defined in Section
9.1.



     “Borrower” is defined in the preamble hereof



     “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state
tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any equipment
containing such information.



     “Borrowing Base” is the sum of: (a) 80% of Eligible Accounts plus (b) 50% of Eligible
Intra-Quarter Managed Accounts; provided that Bank may lower the percentages of the Borrowing Base
after performing an audit of Borrower’s Collateral.



     “Borrowing Base Certificate” is that certain certificate in the form attached hereto as
Exhibit C.



     “Borrowing Resolutions” are, with respect to any Person, those resolutions substantially in
the form attached hereto as Exhibit D.



     “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.



     “Cash Equivalents” means (a) marketable direct obligations issued or unconditionally
guaranteed by the United States or any agency or any State thereof having maturities of not more
than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1)
year after its creation and having the highest rating from either Standard & Poor’s Ratings Group
or Moody’s Investors Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than
one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the
assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of
this definition.



     “Cash Management Services” is defined in Section 2.1.4.



     “Change in Control” means any event, transaction, or occurrence as a result of which (a) any
“person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act
of 1934, as an amended (the “Exchange Act”)), other than a trustee or other fiduciary holding
securities under an employee benefit plan of Borrower, is or becomes a beneficial owner (within the
meaning Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of
Borrower, representing twenty-five percent (25%) or more of the combined voting power of Borrower’s
then outstanding securities; or (b) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted the Board of Directors of Borrower
(together




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with any new directors whose election by the Board of Directors of Borrower was approved by a vote
of at least two-thirds of the directors then still in office who either were directions at the
beginning of such period or whose election or nomination for election was previously so approved)
cease for any reason other than death or disability to constitute a majority of the directors then
in office.




     “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the State of California; provided, that, to the extent that the Code is used to define
any term herein or in any Loan Document and such term is defined differently in different Articles
or Divisions of the Code, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory provisions of law, any or
all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any
Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the
State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes on the provisions thereof relating to such
attachment, perfection, priority, or remedies and for purposes of definitions relating to such
provisions.



     “Collateral” is any and all properties, rights and assets of Borrower described
on Exhibit A.



     “Collateral Account” is any Deposit Account, Securities
Account, or Commodity Account.



     “Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made.



     “Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit D.



     “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other
obligation of another, such as an obligation directly or indirectly guaranteed, endorsed, co-made,
discounted or sold with recourse by that Person, or for which that Person is directly or
indirectly liable; (b) any obligations for undrawn letters of credit for the account of that
Person; and (c) all obligations from any interest rate, currency or commodity swap agreement,
interest rate cap or collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or commodity prices; but
“Contingent Obligation” does not include endorsements in the ordinary course of business. The
amount of a Contingent Obligation is the stated or determined amount of the primary obligation for
which the Contingent Obligation is made unless the Contingent Obligation is limited by the terms
thereof, in which case the amount of the Contingent Obligation shall be such limitation or, if not
determinable, the maximum reasonably anticipated liability for it determined by the Person in good
faith; but the amount may not exceed the maximum of the obligations under any guarantee or other
support arrangement.



     “Continuation Date” means any date on which Borrowers continue a LIBOR Term Loan into another
Interest Period.



     “Control Agreement” is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity
intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower,
and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit
Account, Securities Account, or Commodity Account.



     “Conversion Date” means any date on which Borrower converts a Prime Rate Term Loan to a LIBOR
Term Loan or a LIBOR Term Loan to a Prime Rate Term Loan.



     “Credit Extension” is any Advance, Letter of Credit, Term Loan, FX Forward Contract, amount
utilized for Cash Management Services, or any other extension of credit by Bank for Borrower’s
benefit.



     “Credit Party” means Borrower, and each of Borrower’s Subsidiaries.



     “Current Liabilities” are all obligations and liabilities of Borrower to Bank, plus, without
duplication, the aggregate amount of Borrower’s Total Liabilities that mature within one (1) year.



     “Default Rate” is defined in Section 2.3(b).



-24-









 





     “Deferred Revenue” is all amounts received or invoiced in advance of performance under
contracts and not yet recognized as revenue.



     “Deposit Account” is any “deposit account” as defined in the Code with such additions to such
term as may hereafter be made.



     “Designated Deposit Account” is Borrower’s Deposit Account, account number 3300362344,
maintained with Bank.



     “Dollars,”
“dollars” and “$” each mean lawful money of the United States.



     “EBITDA” shall mean, on a consolidated basis, (a) Net Income, plus (b) Interest Expense, plus
(c) to the extent deducted in the calculation of Net Income, depreciation expense and amortization
expense, plus (d) income tax expense, plus (e) other non-cash expense including stock compensation
expenses.



     “Effective Date” is the date Bank executes this Agreement as indicated on the signature page
hereof.



     “Eligible Accounts” means Accounts which arise in the ordinary course of Borrower’s business
that meet all Borrower’s representations and warranties in Section 5.3. Bank reserves the right at
any time after the Effective Date to adjust any of the criteria set forth below and to establish
new criteria in its good faith business judgment based on an audit of Borrower’s Collateral on at
least 60 days’ prior written notice to Borrower. Eligible Accounts shall not include:



     (a) Accounts that the Account Debtor has not paid within sixty (60) days of due date
regardless of
invoice payment period terms, except for CitiStreet, who shall have up to ninety (90) days
past due date;



     (b) Accounts owing from an Account Debtor, sixty percent (60%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;



     (c) Accounts owing from an Account Debtor which does not have its principal place of business
in
the United States or Canada unless such Accounts are otherwise Eligible Accounts and (i)
covered in full by credit
insurance satisfactory to Bank, less any deductible, (ii) supported by letter(s) of credit
acceptable to Bank,
(iii) supported by a guaranty from the Export-Import Bank of the United States, or (iv) that
Bank otherwise approves
of in writing.;



     (d) Accounts owing from an Account Debtor to whom Borrower is indebted or obligated in any
manner to the Account Debtor (as creditor, lessor, supplier or otherwise — sometimes called
“contra” accounts,
accounts payable, customer deposits or credit accounts), but (i) such Accounts are excluded
only to the extent of
Borrower’s indebtedness to such Account Debtors and (ii) such exclusion does not include
Accounts subject to
customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of
its business, provided that Deferred Revenue is allowed to the extent it can be offset against
amounts invoiced;



     (e) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;



     (f) Accounts with credit balances over sixty (60) days from due date;



     (g) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to
Borrower exceed twenty-five (25%) of all Accounts, except for JP Morgan Chase and CitiStreet,
for which such
percentage is 35%, for the amounts that exceed that percentage, unless Bank approves in
writing;



     (h) Accounts owing from an Account Debtor which is a United States government entity or any
department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to
Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940,
as amended;



     (i) Accounts for demonstration or promotional equipment, or in which goods are consigned, or
sold
on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s
payment may be conditional;



-25-









 





     (j) Accounts owing from an Account Debtor that has not been invoiced or where goods or
services have not yet been rendered to the Account Debtor (sometimes called memo billings or
pre-billings);



     (k) Accounts subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment requirements where the
Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to
perform in accordance with the contract (sometimes called contracts accounts receivable, progress
billings, milestone billings, or fulfillment contracts);



     (l) Accounts owing from an Account Debtor the amount of which may be subject to withholding
based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the
extent of the amount withheld; sometimes called retainage billings);



     (m) Accounts subject to trust provisions, subrogation rights of a bonding company, or
a statutory trust;



     (n) Accounts owing from an Account Debtor that has been invoiced for goods that have not been
shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have entered into an
agreement acceptable to Bank in its sole discretion wherein the Account Debtor acknowledges that
(i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale of the
goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from
Borrower (sometimes called “bill and hold” accounts);



     (o) Accounts that represent non-trade receivables or that are derived by means other than in
the ordinary course of Borrower’s business;



     (p) Accounts or the portion’s thereof for which Borrower has permitted payment to extend
beyond 90 days;



     (q) Accounts subject to chargebacks or others payment deductions taken by an Account Debtor
(but only to the extent the chargeback is determined invalid and subsequently collected by
Borrower);



     (r) Accounts in which the Account Debtor disputes liability or makes any claim (but only up
to the
disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding, or
becomes insolvent, or goes out of business;



     (s) Accounts with selling terms of more than 30 days (45 days for Accounts where the Account
Debtor is Citistreet, Dell Computer, Xerox, Apple Computer, Bank of America, IBM, PepsiCo, JP
Morgan Chase and Hewlett-Packard); provided that Bank may approve other accounts on a case by case
basis from Account Debtors that represent $25,000 or more of Borrower’s revenue per year; and



     (t) Accounts for which Bank in its good faith business judgment determines collection to be
doubtful.



     “Eligible Intra-Quarter Managed Accounts” is the portion of Intra-Quarter Managed Accounts
representing services: (i) that have been fully performed by Borrower, (ii) for which the relevant
Account Debtor owes Borrower, and (iii) the invoice for which is scheduled to be delivered no later
than the end of the calendar quarter during which the relevant services were provided.



     “Equipment” is all “equipment” as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the foregoing.



     “ERISA” is the Employee Retirement Income Security Act of 1974, and its
regulations.



     “Event of Default” is defined in Section 8.



     “Fixed Charge Coverage Ratio” is the ratio of Borrowers’ EBITDA for the fiscal quarter ending
on the date of measurement to the sum of scheduled principal and interest payments on Indebtedness
for such fiscal quarter.



-26-









 





     “Foreign Currency” means lawful money of a country other than the United States.



     “Funding Date” is any date on which a Credit Extension is made to or on account of Borrower
which shall be a Business Day.



     “FX Business Day” is any day when (a) Bank’s Foreign Exchange Department is conducting its
normal business and (b) the Foreign Currency being purchased or sold by Borrower is available to
Bank from the entity from which Bank shall buy or sell such Foreign Currency.



     “FX Forward Contract” is defined in Section
2.1.3.



     “FX Reduction Amount” is defined in
Section 2.1.3.



     “FX Reserve” is defined in
Section 2.1.3.



     “GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other Person as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date of determination.



     “General Intangibles” is all “general intangibles” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work, whether published or unpublished, any
patents, trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise
agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims,
income and other tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending (whether in contract,
tort or otherwise), insurance policies (including without limitation key man, property damage, and
business interruption insurance), payments of insurance and rights to payment of any kind.



     “Governmental Approval” is any consent, authorization, approval, order, license, franchise,
permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or
other act by or in respect of, any Governmental Authority.



     “Governmental Authority” is any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities exchange and any self-regulatory
organization.



     “Guarantor” is any present or future guarantor of the Obligations, including Financial
Engines Advisors, L.L.C.



     “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.



     “Indemnified Person” is defined in Section 12.2.



     “Initial Audit” is Bank’s inspection of Borrower’s Accounts, the Collateral, and Borrower’s
Books.



     “Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.




-27-











 





     “Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date, including, in any
event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower
and its Subsidiaries, including, without limitation or duplication, all commissions, discounts, or
related amortization and other fees and charges with respect to letters of credit and bankers’
acceptance financing and the net costs associated with interest rate swap, cap, and similar
arrangements, and the interest portion of any deferred payment obligation (including leases of all
types).



     “Interest Payment Date” means, with respect to any LIBOR Term Loan, the last day of each
Interest Period applicable to such LIBOR Term Loan, but not less often than every three months
and, with respect to Prime Rate Term Loans and Prime Rate Advances, the first day of each month
(or, if that day of the month does not fall on a Business Day, then on the first Business Day
following such date), and each date a Prime Rate Term Loan is converted into a LIBOR Term Loan to
the extent of the amount converted to a LIBOR Term Loan.



     “Interest Period” means, as to any LIBOR Term Loan, the period commencing on the date of such
LIBOR Term Loan, or on the conversion/continuation date on which the LIBOR Term Loan is converted
into or continued as a LIBOR Term Loan, and ending on the date that is 1, 2, 3 or 6 months
thereafter, in each case as Borrower may elect in the applicable Notice of Borrowing or Notice of
Conversion/Continuation; provided, however, that (a) no Interest Period with respect to any LIBOR
Term Loan shall end later than the Term Loan Maturity Date, (b) the last day of an Interest Period
shall be determined in accordance with the practices of the LIBOR interbank market as from time to
time in effect, (c) if any Interest Period would otherwise end on a day that is not a Business
Day, that Interest Period shall be extended to the following Business Day unless, in the case of a
LIBOR Term Loan, the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding Business Day, (d)
any Interest Period pertaining to a LIBOR Term Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period, and (e) interest shall accrue from and include the first
Business Day of an Interest Period but exclude the last Business Day of such Interest Period.



     “Interest Rate Determination Date” means each date for calculating the LIBOR for purposes of
determining the interest rate in respect of an Interest Period. The Interest Rate Determination
Date shall be the second Business Day prior to the first day of the related Interest Period for a
LIBOR Term Loan.



     “Intra-Quarter Managed Accounts” are Accounts arising out the managed account services
provided by Borrower to its customers that would otherwise qualify as Eligible Accounts except for
the fact that the same have not been billed to the relevant Account Debtor.



     “Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process and finished
products, including without limitation such inventory as is temporarily out of Borrower’s custody
or possession or in transit and including any returned goods and any documents of title
representing any of the above.



     “Investment” is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.



     “IP Agreement” is that certain Intellectual Property Security Agreement executed and
delivered by Borrower to Bank dated as of even date herewith.



     “IPO” is an initial public offering of Borrower’s stock.



     “Letter of Credit” means a standby letter of credit issued by Bank or another institution
based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set
forth in Section 2.1.2.



     “Letter of Credit Application” is defined in Section 2.1.2(a).



     “Letter of Credit Reserve” has the meaning set forth in Section 2.1.2(c).



-28-









 





     “LIBOR” means, for any Interest Rate Determination Date with respect to an Interest Period
for any Term Loan to be made, continued as or converted into a LIBOR Term Loan, the rate of
interest per annum (as set forth by Bloomberg Information Service or any successor thereto or any
other service selected by Lender which has been nominated by the British Bankers’ Association as
an authorized information vendor for the purpose of displaying such rates) at which deposits in
United States Dollars are offered to Bank in the London interbank market (rounded upward, if
necessary, to the nearest 0.0001%) in which Bank customarily participates at 11:00 a.m. (local
time in such interbank market) two (2) Business Days prior to the first day of such Interest
Period for a period approximately equal to such Interest Period and in an amount approximately
equal to the amount of such Term Loan.



     “LIBOR Rate” means, for each Interest Period in respect of LIBOR Term Loans, an interest rate
per annum (rounded upward, if necessary, to the nearest 0.0001%) equal to LIBOR for such Interest
Period divided by one (1) minus the Reserve Requirement for such Interest Period, but in no event
shall the LIBOR Rate be less than one and one-half percent (1.50%).



     “LIBOR Term Loan” means any portion of the Term Loan that bears interest based on the LIBOR
Rate.



     “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other
encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise
against any property.



     “Loan Documents” are, collectively, this Agreement, the Perfection Certificate, the IP
Agreement, the Intercreditor Agreement, any note, or notes or guaranties executed by Borrower or
any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for
the benefit of Bank in connection with this Agreement, all as amended, restated, or otherwise
modified.



     “Loan Supplement” is the form included as part of Exhibit A.



     “Managed Accounts” are those Accounts from clients who receive personalized asset management
services from Borrower.



     “Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s
Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the
business, operations, or condition (financial or otherwise) of Borrower; or (c) a material
impairment of the ability of Borrower to repay any portion of the Obligations.



     “Material Indebtedness” is any Indebtedness the principal amount of which is equal to or
greater than $500,000.



     “Oak Hill Note” is that certain promissory note issued by Financial Engines to Coast DL
Funding LLC in the original principal amount of $10,000,000.



     “Obligations” are Borrower’s any Credit Party’s obligation to pay when due any debts,
principal, interest, Bank Expenses and other amounts Borrower or any Credit Party owes Bank now or
later, whether under this Agreement, the Loan Documents, or otherwise, including, without
limitation, all obligations relating to letters of credit (including reimbursement obligations for
drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if
any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower or any Credit Party assigned to Bank, and the performance of Borrower’s
any Credit Party’s duties under the Loan Documents.



     “Operating Documents” are, for any Person, such Person’s formation documents, as certified
with the Secretary of State of such Person’s state of formation on a date that is no earlier than
30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in
current form, (b) if such Person is a limited liability company, its limited liability company
agreement (or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current amendments or
modifications thereto.



     “Payment/Advance Form” is that certain form attached hereto as Exhibit B.



-29-









 





     “Perfection Certificate” is defined in
Section 5.1.



     “Permitted Distributions”
means:



     (a) purchases of capital stock from former employees, consultants and directors pursuant to
repurchase agreements or other similar agreements in an aggregate amount not to exceed $300,000 in
any fiscal year plus $1,000,000 per year to allow for purchases of restricted stock from executives
in an amount necessary to pay withholding tax, provided that at the time of such purchase no
Default or Event of Default has occurred and is continuing;



     (b) distributions or dividends consisting solely of Borrower’s capital stock;



     (c) purchases for value of any rights distributed in connection with any stockholder rights
plan;



     (d) purchases of capital stock or options to acquire such capital stock with the proceeds
received from a substantially concurrent issuance of capital stock or convertible securities;



     (e) purchases of capital stock pledged as collateral for loans to employees;



     (f) purchases of capital stock in connection with the exercise of stock options or stock
appreciation rights by way of cashless exercise or in connection with the satisfaction of
withholding tax obligations;



     (g) purchases of fractional shares of capital stock arising out of stock dividends,
splits or combinations or business combinations;



     (h) the settlement or performance of such Person’s obligations under any equity derivative
transaction, option contract or similar transaction or combination of transactions; and



     (i) other distributions, dividends or purchases of Borrower’s capital stock in cash, provided
that the aggregate amount of such distributions, dividends, or purchases made pursuant to this
clause (i) during the period commencing on the Effective Date and ending on the date of
determination, when combined with purchases of Subordinated Debt during such period, shall not
exceed $100,000, and no Default or Event of Default exists or could result from such other
distribution, dividend, or purchase.



     “Permitted Indebtedness” is:



     (a) Borrower’s Indebtedness to Bank under this Agreement and any other Loan Document;



     (b) (i) any Indebtedness that does not exceed $250,000 in principal amount existing on the
Effective Date, and (ii) any Indebtedness in excess of $250,000 in principal amount existing on the
Effective Date and shown on the Perfection Certificate;



     (c) Subordinated Debt;



     (d) unsecured Indebtedness to trade creditors and with respect to surety bonds and similar
obligations] incurred in the ordinary course of business;



     (e) guaranties of Permitted Indebtedness and of obligations of a Borrower or a subsidiary that
do not constitute Indebtedness;



     (f) Indebtedness incurred as a result of endorsing negotiable instruments received in the
ordinary course of business;



     (g) Indebtedness consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect Borrower against fluctuations
in interest rates, currency exchange rates, or commodity prices;



-30-









 





     (h) Indebtedness between Borrower and any of its Subsidiaries or among any of Borrower’s
Subsidiaries;



     (i) Indebtedness with respect to documentary letters of credit;



     (j) capitalized leases and purchase money Indebtedness not to exceed $500,000 in the
aggregate in any fiscal year secured by Permitted Liens;



     (k) Indebtedness of entities acquired in any permitted merger or acquisition
transaction;



     (l) refinanced Permitted Indebtedness, provided that the amount of such Indebtedness is not
increased except by an amount equal to a reasonable premium or other reasonable amount paid in
connection with such refinancing and by an amount equal to any existing, but unutilized,
commitment thereunder; and



     (m) other Indebtedness, if, on the date of incurring any Indebtedness pursuant to this clause
(m), the outstanding aggregate amount of all Indebtedness incurred pursuant to this clause (m)
does not exceed $100,000.



     “Permitted Investments” are:



     (a) Investments existing on the Effective Date;



     (b) (i) marketable direct obligations issued or unconditionally guaranteed by the United
States or its agencies or any State maturing within 1 year from its acquisition, (ii) commercial
paper maturing no more than 2 years after its creation and having the highest rating from either
Standard & Poor’s Corporation or Moody’s Investors Service, Inc., and (iii) Bank’s certificates of
deposit maturing no more than 2 years after issue;



     (c) Investments approved by the Borrower’s Board of Directors or otherwise pursuant to a
Board- approved investment policy;



     (d) Investments in Borrower by any of its Subsidiaries or by Borrower in any Guarantor;



     (e) Investments consisting of Collateral Accounts in the name of Borrower or any Subsidiary so
long as Bank has a first priority, perfected security interest in such Collateral Accounts other
than Deposit Accounts used exclusively for payroll, payroll taxes and other employee wage and
benefit payments to or for the benefit of Borrower’s employees;



     (f) Investments consisting of extensions of credit to Borrower’s or its Subsidiaries’
customers in the nature of accounts receivable, prepaid royalties or notes receivable arising from
the sale or lease of goods, provision of services or licensing activities of Borrower;



     (g) Investments received in satisfaction or partial satisfaction of obligations owed by
financially troubled obligors;



     (h) Investments acquired in exchange for any other Investments in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization;



     (i) Investments acquired as a result of a foreclosure with respect to any secured
Investment;



     (j) Temporary advances to cover incidental expenses in the ordinary course of business not to
exceed $250,000 in one year;



     (k) Investments in joint ventures, strategic alliances, licensing (on a non-exclusive basis)
and similar arrangements customary in Borrower’s industry and which do not require Borrower to
assume or to otherwise become liable for the obligations of any third party not directly related
to or arising out of such arrangement or require Borrower to transfer ownership of non-cash assets
to such joint venture or other entity or transfer of cash in excess of $250,000 in any one fiscal
year;



-31-









 






     (l) Investments consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect a Person against fluctuations
in interest rates, currency exchange rates, or commodity prices;



     (m) Investments consisting of loans and advances to employees; and



     (n) other Investments, if, on the date of incurring any Investments pursuant to
this clause (n), the outstanding aggregate amount of all Investments incurred pursuant to this
clause (n) does not exceed $100,000.



     “Permitted Liens” are:



     (a) (i) Liens securing Permitted Indebtedness described under clause (b) of the definition of
“Permitted Indebtedness” or (ii) Liens arising under this Agreement or other Loan Documents;



     (b) Liens for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains adequate reserves on
its Books, provided that no notice of any such Lien has been filed or recorded under the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;



     (c) Liens (including with respect to capital leases) (i) on property (including accessions,
additions, parts, replacements, fixtures, improvements and attachments thereto, and the proceeds
thereof) acquired or held by Borrower or its Subsidiaries incurred for financing such property
(including accessions, additions, parts, replacements, fixtures, improvements and attachments
thereto, and the proceeds thereof) other than Accounts, Inventory, or (ii) existing on property
(and accessions, additions, parts, replacements, fixtures, improvements and attachments thereto,
and the proceeds thereof) when acquired other than Accounts, Inventory, and Financed Equipment, if
the Lien is confined to such property (including accessions, additions, parts, replacements,
fixtures, improvements and attachments thereto, and the proceeds thereof);



     (d) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited
to the property encumbered by the existing Lien and the principal amount of the indebtedness it
secures may not increase;



     (e) leases or subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or
intellectual property) granted in the ordinary course of
Borrower’s business, if the leases,
subleases, licenses and sublicenses do not prohibit granting Bank a security interest;



     (f) non-exclusive license of intellectual property granted to third parties in the ordinary
course of business,and licenses of intellectual property that could not result in a legal transfer
of title of the licensed property that may be exclusive in respects other than territory and that
may be exclusive as to territory only as to discreet geographical areas outside of the United
States;



     (g) leases or subleases granted in the ordinary course of Borrower’s business, including in
connection with Borrower’s leased premises or leased property;



     (h) Liens in favor of custom and revenue authorities arising as a matter of law to secure the
payment of custom duties in connection with the importation of goods;



     (i) Liens on insurance proceeds securing the payment of financed insurance premiums;



     (j) customary Liens granted in favor of a trustee to secure fees and other amounts owing to
such
trustee under an indenture or other similar agreement;



     (k) Liens on assets acquired in mergers and acquisitions not prohibited by Section 7 of this
Agreement;



-32-









 





     (l) Liens consisting of pledges of cash, cash equivalents or government securities to secure
swap or foreign exchange contracts or letters of credit];



     (m) Liens arising from attachments or judgments, orders, or decrees in circumstances not
constituting an Event of Default under Sections 8.4 and 8.7;



     (n) Liens in favor of other financial institutions arising in connection with Borrower’s
deposit or securities accounts held at such institutions;



     (o) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in
nature arising in the ordinary course of business so long as such Liens attach only to Inventory,
securing liabilities in the aggregate amount not to exceed $500,000 and which are not delinquent
or remain payable without penalty or which are being contested in good faith and by appropriate
proceedings which proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;



     (p) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions,
social security and other like obligations incurred in the ordinary course of business (other than
Liens imposed by ERISA); and



     (q) Liens not otherwise permitted, provided that (i) the amount of all such Liens is not in
excess of $100,000 and (ii) such Liens are subordinate in priority to Bank’s Lien hereunder.



     “Person” is any individual, sole proprietorship, partnership, limited liability company,
joint venture, company, trust, unincorporated organization, association, corporation, institution,
public benefit corporation, firm, joint stock company, estate, entity or government agency.



     “Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest
rate, but in no event shall the Prime Rate be less than four percent (4.00%) per annum.



     “Prime Rate Term Loan” is any portion of the Term Loan that bears interest based on the
Prime Rate.



     “Quick Assets” is, on any date, Borrower’s consolidated, unrestricted cash and Cash
Equivalents, net billed accounts receivable and investments with maturities of fewer than 12
months determined according to GAAP.



     “Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made.



     “Requirement of Law” is as to any Person, the organizational or governing documents of such
Person, and any law (statutory or common), treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its property is subject.



     “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial
Officer and Controller of Borrower.



     “Revolving Line” is an Advance or Advances in an amount equal to Seven Million Dollars
($7,000,000).



     “Revolving Line Maturity Date” is 364 days from the Second Amended and
Restated Effective Date.



     “Securities Account” is any “securities account” as defined in the Code with such additions
to such term as may hereafter be made.



     “Settlement Date” is defined in Section 2.1.3.



     “Subordinated Debt” is (a) Indebtedness incurred by Borrower subordinated to Borrower’s
Indebtedness owed to Bank and which is reflected in a written agreement in a manner and form
reasonably acceptable to Bank




-33-









 







and approved by Bank in writing, and (b) to the extent the terms of subordination do not change
adversely to Bank, refinancings, refundings, renewals, amendments or extensions of any of the
foregoing.




     “Subsidiary” means, with respect to any Person, any Person of which more than 50.0% of the
voting stock or other equity interests (in the case of Persons other than corporations) is owned or
controlled directly or indirectly by such Person or one or more of Affiliates of such Person.



     “Term Loan” is the loan made by Bank pursuant to the terms of Section 2.1.5
hereof.



     “Term Loan Amount” is an amount equal to Ten Million Dollars
($10,000,000).



     “Term
Loan Maturity Date” is May 1, 2012.



     “Term Loan Payment” is defined in Section 2.1.5.



     “Transfer” is defined in Section 7.1.



     “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, and current
portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding all other
Subordinated Debt.



[Signature page follows.]




-34-









 







     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.



	 	 	 	 	 
	BORROWERS:


FINANCIAL ENGINES, INC.

 	 	 
	By  	/s/ Raymond J. Sims
 	 	 
	 	Name:  	Raymond J. Sims 	 	 
	 	Title:  	EVP + CFO 	 	 
	 
	FINANCIAL ENGINES REINCORPORATION SUB, INC.

 	 	 
	By  	/s/ Raymond J. Sims
 	 	 
	 	Name:  	Raymond J. Sims 	 	 
	 	Title:  	EVP + CFO 	 	 
	 	 	 	 	 
	BANK:


SILICON VALLEY BANK

 	 	 
	By  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 	Effective Date:  
	 	 



 









 







	 	 	 	 	 




     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.





	 	 	 	 	 
	BORROWERS:


FINANCIAL ENGINES, INC.

 	 	 
	By  	
/s/ Raymond J. Sims	 	 
	 	Name:  	Raymond J. Sims	 	 
	 	Title:  	EVP &
CFO	 	 
	 
	FINANCIAL ENGINES REINCORPORATION SUB, INC.

 	 	 
	By  	
/s/ Raymond J. Sims	 	 
	 	Name:  	Raymond J. Sims	 	 
	 	Title:  	EVP &
CFO	 	 
	 	 	 	 	 
	BANK:


SILICON VALLEY BANK

 	 	 
	By  	 /s/ Nick Tsiagkas	 	 
	 	Name:  	Nick Tsiagkas	 	 
	 	Title:  	Relationship Manager	 	 
	 	Effective Date: April 20, 2009	 




 











 





EXHIBIT A 




COLLATERAL DESCRIPTION



The Collateral consists of all of Borrowers’ right, title and interest in and to the following
personal property:




     All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles, commercial tort claims, documents, instruments (including any promissory notes),
chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and



     all Borrowers’ Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing; provided, however, that notwithstanding any of the other provisions set forth in Section
4, this Agreement shall not constitute a grant of a security interest in any property to the extent
that such grant of a security interest is prohibited by any Requirement of Law of a Governmental
Authority or constitutes a breach or default under or results in the termination of or requires any
consent not obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property, except to the extent that such Requirement of Law or
the term in such contract, license, agreement, instrument or other document providing for such
prohibition, breach, default or termination or requiring such consent is ineffective under Section
9-406, 9-407, 9-408 or 9-409 of the Code (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity;
provided, however, that such security interest shall attach immediately at such time as such
Requirement of Law is not effective or applicable, or such prohibition, breach, default or
termination is no longer applicable or is waived, and to the extent severable, shall attach
immediately to any portion of the Collateral that does not result in such consequences.




 









 








EXHIBIT
B — LOAN PAYMENT/ADVANCE REQUEST FORM




Deadline for same day processing is Noon P.S.T.




			
	 	 	 
	Fax To:
	 	Date: _________









Loan Payment:




Financial Engines. Inc./Financial Engines Reincorporation Sub, Inc.




	 	 	 
	From Account # 

	 	To Account
	# 
	 	 
	(Deposit Account #)
Principal $ 

$ 


Authorized Signature:  


	 	(Loan Account #)

and/or Interest



Phone Number:
 
	Print Name/Title:  
	 	 














Loan Adavance:





Complete Outgoing Wire Request section below if all or a portion of the funds from this loan
advance are for an outgoing wire.




	 	 	 
	From Account # 

	 	To Account
	# 
	 	 
	(Loan Account #)


Amount of Advance $ 



	 	(Deposit Account #)



	

All Borrower’s representations and warranties in the Second Amended and Restated Loan and Security
Agreement are true, correct and complete in all material respects on the date of the request for an
advance; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date:



	Authorized Signature:  

Print Name/Title:  
	 	
Phone Number:  
 













Outgoing Wire Request:

Complete only if all or a portion of funds from the loan advance above is to be wired.

Deadline for same day processing is noon, P.S.T.





	 	 	 
	Beneficiary
Name:  
	 	 
	Amount of Wire: $ 
	 	 
	Beneficiary Bank:   
	 	 
	Account Number:  
	 	 
	City and State:  
	 	 
	 
	 	 
	Beneficiary Bank Transit (ABA) #:  

	 	Beneficiary Bank Code (Swift, Sort,
Chip, etc.):  
	 

	 	(For International Wire Only)
	 
	 	 
	Intermediary Bank:  

	 	Transit (ABA) #:
 
	For Further Credit to:  

	 
	 	 
	Special Instruction:  











 









 

















By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be
processed in accordance with and subject to the terms and conditions set forth in the agreements(s)
covering funds transfer service(s), which agreements(s) were previously received and executed by me
(us).



	 	 	 
	Authorized
Signature:
 

 

	 	2nd Signature (if required)
	Print Name/Title:  

	 	Print Name/Title:










Telephone #: _______________               Telephone #: _______________





 











 





Exhibit B-1




FORM OF NOTICE OF BORROWING




Financial Engines, Inc.




Date: _________




	 	 	 
	To:

	 	Silicon Valley Bank
	 

	 	3003 Tasman Drive
	 

	 	Santa Clara, CA 95054
	 

	 	Attention: Corporate Services Department
	 
	 	 
	Re:

	 	Second Amended and Restated Loan
and Security Agreement dated as of ______ ___, 2009 (as
amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by and
between Financial Engines, Inc. and Financial Engines Reincorporation Sub, Inc.
(“Borrower”), and Silicon Valley Bank (the
“Bank”)






Ladies and Gentlemen:




     The undersigned refers to the Loan Agreement, the terms defined therein and used herein as so
defined, and hereby gives you notice irrevocably, pursuant to
Section 3.4(a) of the Loan
Agreement, of the borrowing of an Term Loan.



     1. The Funding Date, which shall be a Business Day, of the requested
borrowing is ____________.



     2. The aggregate amount of the requested borrowing is $____________.



     3. The
requested Term Loan shall consist of $____________ of Prime Rate Term Loans and $___________
of LIBOR Term Loans. No Term Loan shall be less than $1,000,000.



     4. The duration of the Interest Period for the LIBOR Term Loans included in the requested Term
Loan shall be _________ months.



     The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the proposed funding before and after giving effect thereto, and to
the application of the proceeds therefrom, as applicable:




     (a) all representations and warranties of Borrower contained in the Loan Agreement are
true,
accurate and complete in all material respects as of the date hereof; provided,
however, that such
materiality qualifier shall not be applicable to any representations and warranties
that already are qualified
or modified by materiality in the text thereof; and provided, further that those
representations and
warranties expressly referring to a specific date shall be true, accurate and complete
in all material respects
as of such date; and




     (b) no Default or Event of Default has occurred and is continuing, or would result from
such
proposed Term Loan.



 









 





	 	 	 	 	 
	Borrower                 	Financial Engines, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Financial Engines Reincorporation Sub, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



For internal Bank use only




	 	 	 	 	 	 	 
	LIBOR Pricing Date	 	LIBOR	 	LIBOR Variance	 	Maturity Date
	 
	 	 	 	___%	 	 







 









 








Exhibit B-2




FORM OF NOTICE OF CONVERSION/CONTINUATION




Financial Engines, Inc.




Date: ___________




	 	 	 
	To:

	 	Silicon Valley Bank
	 

	 	3003 Tasman Drive
	 

	 	Santa Clara, CA 95054
	 

	 	Attention:
	 
	 	 
	Re:

	 	Second Amended and Restated Loan and Security Agreement dated as of _________, 2009 (as
amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by
and between Financial Engines, Inc. and Financial Engines Reincorporation Sub, Inc.
(“Borrowers”), and Silicon Valley Bank (the
“Bank”)






Ladies and Gentlemen:



     The undersigned refers to the Loan Agreement, the terms defined therein being used herein
as therein defined, and hereby gives you notice irrevocably, pursuant to Section 3.5 of the
Loan Agreement, of the [conversion] [continuation] of the Term Loans specified herein, that:



     1. The date of the [conversion] [continuation] is ____________, 20___.



     2. The aggregate amount of the proposed Term Loan to be [converted]
is $____________ or [continued] is $____________.



     3. The Term Loan is to be [converted into] [continued as] [LIBOR] [Prime Rate] Term Loans.



     4. The duration of the Interest Period for the LIBOR Term Loans included in the
[conversion]
[continuation] shall be ______ months.



     The undersigned, on behalf of Borrower, hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed [conversion] [continuation],
before and after giving effect thereto and to the application of the proceeds therefrom:




     (a) all representations and warranties of Borrower stated in the Loan Agreement are
true,
accurate and complete in all material respects as of the date hereof; [provided,
however, that such
materiality qualifier shall not be applicable to any representations and warranties
that already are qualified
or modified by materiality in the text thereof; and provided, further that those
representations and
warranties expressly referring to a specific date shall be true, accurate and complete
in all material respects
as of such date]; and




     (b) no Default or Event of Default has occurred and is continuing, or would result from
such
proposed [conversion] [continuation].



[Signature page follows.]





 









 








	 	 	 	 	 
	Borrower                 	Financial Engines, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Financial Engines Reincorporation Sub, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



For internal Bank use only




	 	 	 	 	 	 	 
	LIBOR Pricing Date	 	LIBOR	 	LIBOR Variance	 	Maturity Date
	 
	 	 	 	___%	 	 







 











 






EXHIBIT C




BORROWING BASE CERTIFICATE




Borrower: Financial Engines, Inc./Financial Engines Reincorporation Sub, Inc.

Lender: Silicon Valley Bank

Revolving Commitment Amount: $7,000,000




	 	 	 	 	 	 	 
	ACCOUNTS RECEIVABLE	 	 	 	 
	1.	 	Accounts Receivable (invoiced) Book Value as of ____________________
	$ 	 	 	 
	 	 	 
	 	 	 
	2.	 	Additions (please explain on reverse)
	$ 	 	 	 
	 	 	 
	 	 	 
	3.	 	TOTAL ACCOUNTS RECEIVABLE
	$ 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 	 
	ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)	 	 	 	 
	4.	 	Amounts over 60 days due
	$ 	 	 	 
	 	 	 
	 	 	 
	5.	 	Balance of 50% over 60 day accounts
	$ 	 	 	 
	 	 	 
	 	 	 
	6.	 	Foreign Accounts
	$ 	 	 	 
	 	 	 
	 	 	 
	7.	 	Foreign Invoiced Accounts
	$ 	 	 	 
	 	 	 
	 	 	 
	8.	 	Contra/Customer Deposit Accounts
	$ 	 	 	 
	 	 	 
	 		 
	9.	 	Intercompany/Employee Accounts
	$ 	 	 	 
	 	 	 
	 	 	 
	10.	 	Credit balances over 60 days
	$ 	 	 	 
	 	 	 
	 	 	 
	11.	 	Concentration Limits
	$ 	 	 	 
	 	 	 
	 	 	 
	12.	 	U.S. Governmental Accounts
	$ 	 	 	 
	 	 	 
	 		 
	13.	 	Other (please explain on reverse)
	$ 	 	 	 
	 	 	 
	 	 	 
	14.	 	TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS
	$ 	 	 	 
	 	 	 
	 	 	 
	15.	 	Eligible Accounts (#3 minus #14)
	$ 	 	 	 
	 	 	 
	 	 	 
	16.	 	ELIGIBLE AMOUNT OF ACCOUNTS (80% of #15)
	$ 	 	 	 
	 	 	 
	 	 	 
	17.	 	50% of Eligible Intra-Quarter Managed Accounts
	$ 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 	 
	BALANCES	 	 	 	 
	18.	 	Maximum Loan Amount
	$ 	 	 	 
	 	 	 
	 	 	 
	19.	 	Total Funds Available [Lesser of #18 or the sum of #16 and #17]
	$ 	 	 	 
	 	 	 
	 	 	 
	20.	 	Present balance owing on Line of Credit
	$ 	 	 	 
	 	 	 
	 	 	 
	21.	 	Outstanding under Sublimits
	$ 	 	 	 
	 	 	 
	 	 	 
	22.	 	RESERVE POSITION (#19 minus #20 and #21)
	$ 	 	 	 
	 	 	 
	 	 	 





[Continued on following page.]





 









 








The undersigned represents and warrants that this is true, complete and correct, and that the
information in this Borrowing Base Certificate complies with the representations and warranties in
the Amended and Restated Loan and Security Agreement between the undersigned and Silicon Valley
Bank.





	 	 	 	 	 
	COMMENTS:


FINANCIAL ENGINES, INC.
 
	By:  	 	 	 
	 	Authorized Signer 	 	 
	Date: 	 	 	 
	 
	COMMENTS:


FINANCIAL ENGINES REINCORPORATION SUB, INC.

 
	By:  	 	 	 
	 	Authorized Signer 	 	 
	Date: 	 	 	 
	 










BANK USE ONLY




	 	 	 	 	 
	 	Received by: 

AUTHORIZED SIGNER


Date: 
	 
	 	Verified: 

AUTHORIZED SIGNER


Date: 


Compliance Status:     Yes     No




 	 
	 














 









 










EXHIBIT D — COMPLIANCE CERTIFICATE




			
	 	 	 
	TO: SILICON VALLEY BANK
	 	Date: _______________
	FROM:	 	 






     The undersigned authorized officers of Financial Engines, Inc. and Financial Engines
Reincorporation Sub, Inc. (“Borrowers”) certify that under the terms and conditions of the Amended
and Restated Loan and Security Agreement between Borrowers and Bank (the “Agreement”), (1) each
Borrower is in complete compliance for the period ending
_______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all
representations and warranties in the Agreement are true and correct in all material respects as
of the last day of the period for which this Certificate is provided except as noted below;
provided, however, that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring to a specific date
shall be true, accurate and complete in all material respects as of such date, (4) each Borrower,
and each of its Subsidiaries, has timely filed all required tax returns and reports, and each
Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and
contributions owed by Borrowers except as otherwise permitted pursuant to the terms of Section 5.9
of the Agreement, and (5) no Liens have been levied or claims made against either Borrower or any
of their Subsidiaries relating to unpaid employee payroll or benefits of which Borrowers have not
previously provided written notification to Bank. Attached are the required documents supporting
the certification. The undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an accompanying letter or
footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of
determination that either Borrower is not in compliance with any of the terms of the Agreement,
and that compliance is determined not just at the date this certificate is delivered. Capitalized
terms used but not otherwise defined herein shall have the meanings given them in the Agreement.



Please indicate compliance status by circling Yes/No under “Complies” column.




	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	 
	 	 	 	 
	Monthly financial statements with Compliance Certificate

	 	Monthly within 30 days
	 	Yes     No
	 
	 	 	 	 
	Annual financial statement (CPA Audited) + CC

	 	FYE within 150 days
	 	Yes     No
	 
	 	 	 	 
	10-Q, 10-K and 8-K

	 	The earlier of (A) five (5)
days after filin (Illegible)
with the SEC or (B) 50 days
after each fiscal quarter
or 95 days after each
fiscal year end,
	 	Yes     No
	 
	 	 	 	 
	Borrowing Base Certificate A/R & A/P Agings

	 	Monthly within 30 days when
Advances plus Letters of
Credit are more than $1.5MM
	 	Yes     No
	 
	 	 	 	 
	Cash Balance Report

	 	Quarterly within 30 days	 	 





Borrowers shall provide Bank with at least fifteen days prior written notice of either
Borrower’s intent to register any copyrights or mask works together with a copy of the
application it intends to file. Borrowers shall promptly provide to Bank copies of all
applications that either Borrower files for patents or for the registration of trademarks,
servicemarks, copyrights or mask works.



The following Intellectual Property was registered (or a registration application submitted) after
the Effective Date (if no registrations, state “None”)



 




 






 









 









	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	Maintain on a Monthly Basis:
	 	 	 	 	 	 
	Minimum Quick Ratio (Adjusted)

	 	1.15:1.0 through 9/30/09

1.25:1.0 thereafter
	 	___:1.0
	 	Yes     No
	Maintain Annually:
	 	 	 	 	 	 
	Maximum Unfunded Capital Expenditures

	 	$2,000,000 for FY 2009;
$4,000,000 for each FY
thereafter
	 	$_______
	 	Yes     No
	Maintain on a Quarterly Basis:
	 	 	 	 	 	 
	Minimum EBITDA

	 	$750,000 for each of the two
quarters ending 3/31/09 and
9/30/09
	 	$_______
	 	Yes     No
	 
	Minimum Fixed Charge Coverage Ratio

	 	Commencing 9/30/09.
See 6.5(b)(ii)
	 	___:1.0
	 	Yes     No






     The following financial covenant analysis and information set forth in Schedule 1
attached hereto are true and accurate as of the date of this Certificate.



     The following are the exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions to note.”)





 






 






 








	 	 	 	 	 
	 	FINANCIAL ENGINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FINANCIAL ENGINES REINCORPORATION SUB, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 






BANK USE ONLY




	 	 	 	 	 
	 	Received
by: 

AUTHORIZED SIGNER


Date: 

 	 
	 
	 	Verified: 

AUTHORIZED SIGNER


Date: 



Compliance Status: Yes            No




 	 
	 










 









 




Schedule 1 to Compliance Certificate

Financial Covenants of Borrower



II. Adjusted Quick Ratio (Section 6.6(a)(i))




Required: 1.15:1.00 through 9/30/09 and 1.25:1.00 thereafter




Actual:




	 	 	 	 	 
	 	 	 
	 	 
	A
	 	Aggregate value of the unrestricted cash and Cash Equivalents of Borrower and its
Subsidiaries

	 	$_______
	B
	 	Aggregate value of the net billed accounts receivable of Borrower and its Subsidiaries

	 	$_______
	C
	 	Aggregate value of the Investments with maturities of fewer than 12 months of
Borrower and it Subsidiaries

	 	$_______
	D
	 	Quick Assets (the sum of lines A through C)

	 	$_______
	E.
	 	Aggregate value of Obligations to Bank

	 	$_______
	F
	 	Aggregate value of liabilities that should, under GAAP, be classified as liabilities
on Borrower’s consolidated balance sheet, including all Indebtedness, not otherwise
reflected in line E above, that matures within one (1) year

	 	$_______
	G
	 	Aggregate value of all amounts received or invoiced by Borrower in advance of
performance under contracts and not yet recognized as revenue

	 	$_______
	H
	 	Current Liabilities (the sum of lines E and F minus line G)

	 	$_______
	I
	 	Adjusted Quick Ratio (line D divided by line H)
	 	 






II. EBITDA




Required: See Section 6.6(b)(i)




Actual:




	 	 	 	 	 
	A.
	 	Net Income [per GAAP]
	 	$_______
	B.
	 	To the extent included in the determination of Net Income
	 	 
	 	 	1. The provision for income taxes

	 	$_______
	 	 	2. Depreciation expense

	 	$_______
	 	 	3. Amortization expense

	 	$_______
	 	 	4. Interest Expense

	 	$_______
	 	 	5. All other charges which are both non-cash and
non-recurring, including for stock-based compensation

	 	$_______
	 	 	7. The sum of lines 1 through 5

	 	$_______
	C.
	 	EBITDA (line A plus line B.6)
	 	  _______







 











 






III. FIXED CHARGE COVERAGE RATIO




Required: See Section 6.6(b)(ii).




Actual:




	 	 	 	 	 
	A.	 	EBITDA
	 	$______
	B.	 	Scheduled payments of principal and interest for the quarter
	 	$______
	C.	 	Fixed Charge Coverage Ratio: Line A divided by Line B
	 	___:1.0






 









 






Reaffirmation of Unconditional Secured Guaranty




          This Reaffirmation of Unconditional Secured Guaranty is entered into as of April 20, 2009, by
the undersigned (the “Guarantor”) in favor of SILICON VALLEY BANK (“Lender”).




          Whereas, Guarantor executed and delivered to Lender an Unconditional Secured Guaranty dated
as of June 26, 2008 (the “Guaranty”) with respect to the obligations of Financial Engines, Inc.
and Financial Engines Reincorporation Sub, Inc. (together, “Borrowers”) under an Amended and
Restated Loan and Security Agreement dated as of June 26, 2008 (the “Existing Loan Agreement”) by
and among Borrowers and Lender; and




          Whereas, Borrowers and Lender are amending the Existing Loan Agreement pursuant to that
certain Second Amended and Restated Loan and Security Agreement dated as of the date hereof
(“Second Amended Loan Agreement”) to, among other things, provide a term loan of up to $10,000,000
and extend the Revolving Line Maturity Date to April 19, 2010 (undefined terms herein shall have
the meanings provided in the Second Amended Loan Agreement).




          Now therefore, for valuable consideration, receipt of which is acknowledged, Guarantor hereby
agrees as follows:




          1. Reaffirmation of Guaranty. Guarantor hereby ratifies and reaffirms its obligations under
its Guaranty and agrees that none of the modifications to the Loan Agreement as set forth in the
Second Amended Loan Agreement shall impair such Guarantor’s obligations under its Guaranty or
Bank’s rights under its Guaranty.




          2. Continuing Effect and Absence of Defenses. Guarantor acknowledges that its Guaranty is
still in full force and effect and that Guarantor has no defenses, other than actual payment of
the guaranteed obligations, to enforcement of the Guaranty. Guarantor waives any and all defenses
to enforcement of the Guaranty that might otherwise be available as a result of the amendment and
restatement of the Existing Loan Agreement.




	 	 	 	 	 
	 	Financial Engines Advisors, L.L.C.

 	 
	 	By:  	/s/ Raymond J. Sims
 	 
	 	 	Title: EVP + CFO